Indian equity markets closed the week on a strong note, extending their recovery despite ongoing geopolitical tensions, higher crude oil prices, and lingering uncertainty over the global interest-rate outlook. According to latest reports, the BSE Sensex climbed 582.06 points, or 0.75%, to close at 78,151.45, while the Nifty 50 advanced 127.4 points, or 0.52%, to settle at 24,334.30. The total market capitalisation of BSE-listed companies increased by ₹90,807.15 crore during the week, with Tata Consultancy Services emerging as the biggest contributor to market value gains. However, the broader market saw some profit-taking following its recent rally, as both the Nifty Smallcap 100 index shed 0.6% and the Nifty Midcap 100 index declined 1% during the week. Friday's rally was led by Tech Mahindra, Kotak Mahindra Bank, TCS, Reliance Industries, ICICI Bank, Hindustan Unilever, Mahindra & Mahindra, Axis Bank, Bajaj Finance, HDFC Bank, and Infosys, with these stocks advancing 1-4%, while Sun Pharma, Trent, Bharti Airtel, and UltraTech Cement slipped around 1% each.
India's IT sector, which had been a key driver of market recovery, is now grappling with weak revenue growth in dollar terms despite sustained order flow. According to The Economic Times, Infosys reported results below expectations, impacting its stock performance negatively, with the company losing 9% over the past three months. The country's second largest IT exporter has a trailing price-earnings multiple at 14, significantly below its long-term average of above 25, reflecting uncertainty over future growth prospects amid geopolitical tensions and AI technology disruption. TCS, HCL Technologies, and Wipro in the order of their revenue size either reported a drop or under 1% growth, with only Tech Mahindra reporting 2.2% sequential growth at $1.7 billion for the June quarter. However, AI-driven sales are gaining traction, with Infosys's AI revenue accounting for 8.2% of total revenue in the June quarter from under 5% a year ago, and TCS reporting similar AI revenue share of 8.5%.
The Nifty IT index emerged as the top gainer, rising 4.3%, driven by strong buying in technology stocks following upbeat earnings from heavyweight companies. This sectoral outperformance provided crucial support to the broader market recovery. The Nifty Consumer Durables index advanced 3%, while the Nifty Media index gained 2.5% and the Nifty Private Bank index rose 1.5%. On the downside, the Nifty Capital Markets index was the biggest laggard, declining nearly 3%, with the Nifty Realty and Metal indices falling 2% each. The Nifty India Defence index slipped 1.5% and the Nifty FMCG index lost 1% during the week. According to Vinod Nair from Geojit Investments, IT stocks led gains following constructive management commentary and positive earnings expectations, while consumer durables benefited from optimism around stronger domestic demand in the second half of FY27.
Global technology stocks remained under significant pressure, with US markets witnessing a steep selloff on Friday. As reported by Mint, semiconductor stocks bore the brunt of the decline, pulling the Philadelphia SE Semiconductor Index over 20% below its record high reached in June, officially placing the index in bear market territory. This global technology weakness has created headwinds for Indian markets, particularly affecting sectors with strong technology exposure. However, Indian markets showed resilience by focusing on domestic fundamentals and selective stock picking, with technology companies benefiting from better-than-expected earnings. Despite the global weakness, the Indian market has remained relatively resilient, with several analysts pointing to India's so-called "anti-AI advantage" as a key supporting factor. The S&P 500 lost 1.55% for the week, the Nasdaq declined 2.9%, and the Dow fell 0.93%, while South Korea's Kospi remained in a bear market despite being up nearly 62% for the year.
According to Pravesh Gour, Senior Technical Analyst at Swastika Investmart, global developments are expected to play a crucial role in determining market direction. As reported by Mint, investors will closely monitor geopolitical developments in the Middle East, as any escalation in tensions could trigger volatility in crude oil prices and dampen overall market sentiment. Key factors to watch include movements in the US Dollar Index (DXY), US Treasury bond yields, FII and DII money flows, and key US macroeconomic data releases. The Indian rupee extended its losing streak for a fourth consecutive week, ending 96 paise weaker at 96.28 against the US dollar on July 17, compared with 95.32 on July 10, adding to market pressure. Rupak De from LKP Securities noted that the Nifty continues to trade above its key moving averages, while the RSI has entered a bullish crossover, indicating strengthening momentum, with the index likely to move towards 24,800 in the near term.
The earnings season will remain the key market driver, with 256 companies set to announce their Q1 results in the coming week. Key companies on the earnings calendar include Paytm, Bajaj Auto, TVS Motor, Adani Power, BPCL, Eternal, IndusInd Bank, HPCL, UltraTech Cement, Infosys and Bank of Baroda. According to Mint, several heavyweight companies including UltraTech Cement, Bajaj Auto, Dr. Reddy's Laboratories, Nestlé India, Infosys, and Shriram Finance are scheduled to announce their quarterly earnings between 20 and 24 July 2026. Ajit Mishra from Religare Broking recommended focusing on fundamentally strong companies with robust earnings visibility, particularly in banking, financial services, information technology, capital goods, infrastructure, defence, and select healthcare stocks. Vinod Nair from Geojit noted a clear rotation towards largecaps, driven by rich valuations in the broader market and the relatively attractive valuations and stronger earnings visibility of bluechip companies.
