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Informist, Tuesday, Jun. 9, 2026

 

By Arundathi A R

 

MUMBAI – The domestic equity market will continue to depend on the news flow from the global front to determine its direction. Analysts expect the positive bias in the market to be sustained as long as the cues from West Asia are positive. They are also bullish on banking stocks, which largely helped the Nifty 50 index to recover Tuesday. The price of crude oil will remain a key factor to be monitored, as it varies significantly according to the shifts in global events.

 

"The breakout (of the Nifty Bank) above the 54500 level remains valid, and the banking index continues to exhibit a stronger technical structure relative to the broader market," Jigar Patel, senior manager at Anand Rathi Shares and Stock Brokers, said. "As long as the 52800–53200 support zone remains protected, the prevailing trend is expected to remain favourable for the bulls." He has maintained a positive outlook on the banking sector, supported by its resilient price structure and relative outperformance. The Nifty Bank Tuesday settled 2% higher, while the Nifty PSU Bank ended nearly 4% higher.

 

Broking firm Antique Stock Broking expects the Nifty 50 to witness an earnings downgrade in the coming quarters due to a sharp surge in prices of key raw materials like crude oil because of the war in West Asia and a likely deficient south-west monsoon. It sees the Nifty 50's year-on-year earnings growth estimate of 17% for the financial year 2026-27 (Apr-Mar) to be aggressive and said it could be downgraded by around 4% in upcoming quarters.

 

The broking firm has revised the Nifty 50 index's target for March 2027 to 27000 points from 28000, based on 19 times the FY28 earnings-per-share of INR 1,435, factoring in the likely earnings downgrade in the coming quarters. Antique's estimates for the Nifty 50's earnings per share for FY27 and FY28 were INR 1,251 and INR 1,435, respectively.

 

HDFC Securities has estimated the earnings growth of the companies under its coverage at 14.4% in FY27 and 14.6% in FY28. "We expect growth outlook at the aggregate level (ex-oil & gas) to remain steady led by BFSI (banking, financial services, and insurance) and consumer sectors," the brokerage said in its report. "Oil & gas sector driven by OMCs (oil-marketing companies) pose downside risk to the aggregate earnings if the war escalates and crude further goes up."

 

HDFC Securities sees the economy facing inflationary headwinds in FY27, led by a rise in commodity and fuel prices. The El Nino weather condition is also expected to put the rural economy under pressure due to lower monsoon rainfall.

 

Crisil Intelligence highlighted in its report that the recently approved INR 100 billion price stabilisation fund for oil-marketing companies will help absorb some of the increase in fuel procurement costs when crude oil prices surge. "This will ensure stable aviation turbine fuel prices for Indian airline carriers by dampening the impact of global crude volatility," it said in the report.

 

It expects Brent crude oil to stay near $90-$95 a barrel this fiscal year amid the continuing war in West Asia. "This is likely to moderate passenger traffic growth to 4–6%, compared with double-digit growth in recent years." Crisil also expects the price stabilisation fund to provide indirect support to airlines by reducing the severity of fuel price hikes and limiting abrupt increase in ATF prices. Lower fuel cost volatility is likely to help airlines manage operating expenses more effectively, improve earnings visibility, and reduce pressure on margins, according to Crisil.

 

At 1620 IST, the Brent crude oil August futures contract was down nearly 2% at $92.58 a barrel. In the last seven days, crude oil prices shed 2.5% and were marginally down in a week. From the pre-war levels, prices fell over 27%.

 

Foreign investors net sold shares worth INR 55.56 billion Monday, down from INR 87.76 billion offloaded Friday. Domestic investors supported the equity market by net buying shares worth INR 51.65 billion. Foreign institutional investor flows rose nearly 37% in a week. Sunny Agrawal, head of fundamental equity research at SBICAPS Securities, expects foreign investors to turn into large net buyers in another six months.

 

The Reserve Bank of India and the government Friday announced a slew of measures that are expected to arrest the rupee's depreciation. The RBI also announced several measures, including a concessional forex swap facility and relief on hedging costs, to help improve foreign flows. The government also exempted foreign institutional investors from paying capital gains tax on investments in government bonds. "I think many experts are expecting that maybe $50 (million) to $60 million of inflows can be seen on account of these measures," Agrawal of SBICAPS said.

 

Tuesday, the Nifty 50 settled 0.5% higher at 23242.10, up 119.10 points. The BSE Sensex also closed 0.5% higher at 73918.76, up 394.50 points. Patel of Anand Rathi sees the Nifty 50 finding support at the 23100-point level and facing resistance at 23800 points.  End

 

US$1 = INR 95.3500

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

 

Edited by Rajeev Pai

 

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