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Informist, Friday, Jul. 3, 2026

By Arya S. Biju

MUMBAI – The benchmark equity indices are likely to continue their gradual uptick in the coming sessions, supported by lower crude oil prices, favourable global cues, and easing concerns over the US interest rate outlook. Market participants will now focus on the June quarter earnings announcements and management commentaries, set to be kick-started next week by information technology bellwether Tata Consultancy Services. Investors will also monitor the progress of the southwest monsoon after rainfall in June remained 40% below the long-period average.

Further, progress in the US-Iran peace process and India's trade negotiations with Japan, the UK, and the US will be closely watched by investors. "While risks persist amid downward revisions to earnings growth estimates, monsoon-related inflation concerns, and continued FII (foreign institutional investor) caution, much of the visible uncertainty appears to be priced in, leaving room for a constructive read on incremental positives," Vinod Nair, head of research at Geojit Investments, said in a note. The broader bias remains buy-on-dips, with a preference for large-caps, given their relative earnings resilience and attractive valuations, he added.

Brent crude oil continued to hover around $72 per barrel Friday as traders remained cautiously hopeful about the efforts for peace between the US and Iran, ahead of the long Independence Day holiday weekend in the US. Shipping through the Strait of Hormuz continued to recover, easing concern about crude oil supply. At 1853 IST, the September futures contract of Brent Crude was at $71.83 per barrel, up marginally from the previous close.

Brokerage Citigroup sees Brent Crude falling further to $60 a barrel by the year-end as disruptions in the strait end. While the road to a US-Iran peace deal still remains uncertain and the dispute over administration of the Strait of Hormuz and transit fees persists, the memorandum of understanding is expected to hold and turn into a deal over the next few months, The Wall Street Journal reported, citing analysts at Citi Research.

The immediate macroeconomic risks to India have moderated considerably as crude oil prices retrace their way towards pre-war levels, Seema Srivastva, senior research analyst at SMC Global Securities, said. "For an economy that imports nearly 85% of its crude requirements, this sustained softening eases pressure on imported inflation, reduces the national oil import bill, and improves the current account balance," she said. Further, lower oil prices effectively reduce transportation, logistics, and industrial input costs, which helps to contain broader inflationary pressures and shields consumer spending. Furthermore, this relief creates critical fiscal headroom for the government to sustain its capital expenditure momentum, keeping gross domestic product growth expectations intact, Srivastva said.

Meanwhile, concern over the delayed southwest monsoon impacting rural income and demand persists. While the India Meteorological Department forecast July rainfall at 94% of the long period average, it revised its 2026 monsoon forecast to 90% of the long period average due to El Nino conditions. In June, rainfall was 40% below the long period average. "The possibility of an El Nino-led disruption to rainfall remains a key near-term risk, as weaker monsoon conditions could fuel food inflation, weigh on rural consumption, and delay the broader recovery in domestic demand," Srivastva said.

In the near term, sectoral focus is expected to remain on defence and refining, Siddhartha Khemka, head of research, wealth management, at Motilal Oswal Financial Services, said in a note. Defence stocks are likely to remain in focus ahead of the Defence Acquisition Council meeting, where procurement proposals worth over INR 1 trillion are expected to be considered. Meanwhile, refining companies may also attract attention following reports of higher refined fuel exports, highlighting India's growing role in global energy supply chains, Khemka said.          

Friday, the Nifty 50 ended at 24270.85, up 95.15 points or 0.4%. The BSE Sensex settled at 77763.91, up 261.79 points or 0.3%. Over the week, the indices rose 0.9%, rising for the fourth straight week, the longest winning run since the US-Israel war on Iran began Feb. 28. Next week, the Nifty 50 is seen finding support at 24180-24100 points and resistance at 24400–24450 points, Hitesh Rathi, technical analyst at Angel One, said in a note.  End

US$1 = INR 95.21

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

Edited by Rajeev Pai

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