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Informist, Tuesday, Jun. 23, 2026

By Arya S. Biju

MUMBAI – Analysts are divided on the market direction Wednesday, with some expecting the frontline indices to rise amid easing geopolitical tensions and lower crude oil prices while others see further downside amid concern over the impact of delayed southwest monsoon and weakness in information technology stocks. Investors will watch out for further progress in the US-Iran peace negotiations, updates on monsoon, and the ongoing US-India trade discussions for cues on market direction in the near term, analysts said.

While easing geopolitical tensions amid progress in US-Iran peace negotiations and lower crude oil prices improved the prospects for economic growth and recovery in corporate earnings in the second half of the current fiscal year, concern over the delayed southwest monsoon continues to be a key concern for the near term, analysts said. The southwest monsoon this year has been off to a slow start. During Jun. 1–21, India received 57.4 millimetres of rainfall, 42% below normal. The India Meteorological Department has projected the southwest monsoon rainfall in 2026 to be below normal at 90% of the long-period average.

An adverse south-west monsoon could weigh on India's growth and inflation outlook, a Reserve Bank of India staff said in the State of the Economy article part of the monthly Bulletin late Monday. Lower rainfall and the likelihood of an El Nino this year have raised concerns over higher food prices. Some analysts, however, do not expect a major drop in rural demand due to delayed southwest monsoon on expectations of government measures supporting the rural economy. 

Further, IT stocks may remain under pressure in the coming session, tracking weakness in the futures contract of US tech-heavy NASDAQ 100 index. At 1721, the September futures contract of NASDAQ-100 was around 2.6% lower. Tuesday most domestic IT stocks fell, tracking weakness across global technology stocks. "The selloff (in IT stocks) is being interpreted as a sign of growing caution around AI and technology-related stocks. Investors appear to be reassessing valuations after a strong run-up, leading to profit booking across the sector," Tej Shah, research analyst at Motilal Oswal Financial Services, wrote in a social media post.

Amid growing worries over artificial intelligence-related stocks valuations, some analysts now expect foreign portfolio investors to eventually turn net buyers of Indian equities. "If you are an FII (foreign institutional investor), there is a limit to how much more of...NVIDIA, Taiwan Semiconductor or Samsung, all those things you can keep buying...And now you're worried a little bit about the AI trade also being in a bubble or overvalued. So, you want to balance, you want to hedge a little bit. So, you want to have something which is non-AI. And India is one of the biggest places for that, traditional economy, but high growth," Vikas Gupta, chief executive officer and chief investment strategist at OmniScience Capital said. "It (Indian Economy) might not be as fast growth as AI, but it's a high growth economy."

Selling of domestic equities by foreign investors has come down sharply since Jun. 15. They turned net buyers of domestic equities in three of the six sessions. Till Monday, foreign portfolio investors net sold domestic equities worth over INR 549 billion, way higher than the near INR 330 billion worth of shares sold in May, but lower than the INR 608 billion worth of shares sold in April and the over INR 1 trillion sold in March. 

In another development, with US Trade Representative Jamieson Greer arriving in India Monday, discussions between the two nations are underway to finalise the first tranche of the proposed bilateral trade agreement, US Ambassador to India Sergio Gor said. "We are moving decisively toward finalizing a strong bilateral trade agreement that will unlock new economic opportunities for both countries and significantly deepen the U.S.-India economic partnership," Gor said in a post on X. 

Tuesday, The Nifty 50 closed at 23824.10, down 278.80 points or 1.2%. The BSE Sensex settled at 76200.68, down 893.39 points or 1.2%. Tuesday, the 50-stock index is seen finding immediate support at 23800 points and immediate resistance at 24020 points, Nandish Shah, senior derivative and technical analyst at HDFC securities, said. If the index breaches the 24020-point mark, he expects it to find its next resistance at 24200–24250 points. Positionally, he sees positive sentiment to continue in the domestic market and suggests investors to "buy on dips." 

Shrikant Chouhan, head of equity research at Kotak Securities, sees further weakness in Nifty 50 from the current levels. "A long bearish candle on daily charts and a lower top formation on intraday charts indicate further weakness from the current levels. For day traders, the key levels are 23900 or the 50-day SMA (Simple Moving Average) level for Nifty," he said. Below, 23900, he expects the Nifty 50 to slip to 23640-23575 points. On the upside, the index is seen finding resistance at 24000-24050 points, he added.  End

US$1 = INR 94.7350

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

Edited by Akul Nishant Akhoury

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