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Informist, Tuesday, May 12, 2026

 

By Arundathi A R

 

MUMBAI – The domestic equity market is expected to remain weak in the coming days until there is clarity on a resolution to the ongoing US-Iran conflict. US President Donald Trump's rejection of Iran's proposal to end the war dampened market sentiment. Analysts expect crude oil prices to guide market direction as they have resumed their climb above $100 per barrel. Cipla and Bharti Airtel will be in focus on Wednesday as they report their March quarter earnings.

 

"Since there is no immediate resolution visible, volatility is likely to remain high in the near term," Narendra Solanki, fundamental research head at Anand Rathi-Investment Services, said. "Higher prices usually lead to slower demand and policy interventions from major economies."

 

At 1659 IST, the Brent crude oil July futures were over 3% higher at $107.44 per barrel. Since the war began in West Asia at the end of February, crude oil futures have gained about 56%. Solanki sees possible earnings downgrades in the coming quarters if crude oil prices remain elevated for an extended period. "Downgrades might be moderate initially but can intensify if geopolitical tension rises further," he said.

 

Brokerage JM Financial said the war between the countries could moderate India's GDP growth rate to 6.0–6.5%. It also sees the current account deficit deteriorating to 1.9% of GDP, as inward remittances will also be at risk. The brokerage suggested the government should focus on enhancing strategic petroleum reserves, after Prime Minister Narendra Modi's call on citizens to conserve foreign exchange reserves by curtailing gold imports, reducing fuel and fertiliser consumption, and cutting international travel. "... we believe that the PM's call for conserving forex reserves is a precursor to actual austerity measures in the coming weeks if the conflict does not end," JM Financial said in a report.

 

Elara Capital said businesses expect prices to normalise and are reluctant to enter into long-term contracts at current levels, though they are forced to buy to meet immediate requirements. "No supply disruption, but widespread price hikes, extended lead times, and planning uncertainty," were among the findings of detailed channel checks on small companies, raw material suppliers, and other industry participants, the brokerage said in a report.

 

Tuesday, the Nifty 50 ended 1.8% lower at 23379.55, down 436.30 points. The BSE Sensex ended 1.9% lower at 74559.24, down 1456,04 points. "The Nifty 50 is expected to face resistance at 23800 points and find support at 23200 points," Jigar Patel, technical analyst at Anand Rathi Shares and Stock Brokers, said.

 

Meanwhile, data released at 1600 IST showed that India's CPI inflation rose to a 13-month high of 3.48% in April from 3.40% in March, but came sharply below the consensus estimate of 3.8%. CPI inflation rose mainly due to higher prices in food and restaurant services, reflecting the impact of cooking gas supply disruptions stemming from the conflict in West Asia.

 

Selling by foreign institutional investors continued in the equity market, as they offloaded shares worth INR 84.38 billion on Monday. Domestic investors, however, supported the equity market by buying shares worth INR 59.40 billion in the previous session.

 

The rupee settled at a record closing low amid a rise in crude oil prices. After plunging to a record low of 95.74 a dollar, the Indian unit closed at 95.63 on Tuesday, down 0.3% from the previous close. "In the near term, the rupee is expected to trade within a range of 95.25–96.00, with volatility likely to remain elevated," Jateen Trivedi, commodity and currency research analyst at LKP Securities, said in a note.

 

The Nifty 50 constituent Cipla is expected to post a sharp decline in net profit for Jan-Mar, mainly due to weak sales in the US and increased competition for the generic cancer drug Revlimid. The pharma company's consolidated net profit is expected to be INR 7.27 billion, down nearly 41% on year. Bharti Airtel is likely to report a net profit of INR 74.29 billion in the March quarter, up nearly 42% from a year ago, excluding exceptional items. 

 

Post market hours, Dr.Reddy's Laboratories reported a consolidated net profit of INR 2.21 billion for the March quarter, down 86% on year. This was sharply lower than the analysts' estimate of INR 8.95 billion. Its consolidated revenue was INR 75.46 billion, down 11.5% on year, below the Street's view of INR 82.69 billion.

End

 

US$1 = INR 95.63

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Saji George Titus

 

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