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Informist, Tuesday, Jul. 7, 2026

By Arundathi A R

MUMBAI – The benchmark equity indices are expected to move in a range Wednesday after their four-day rise was paused Tuesday. Analysts see volatility persisting in the market as crude oil prices rose over 1% ahead of the start of the June quarter corporate results. Crude oil prices rose after reports that a Qatari liquefied natural gas carrier was hit near the Strait of Hormuz. Along with the corporate results, market participants will also watch out for further developments from the US-Iran war. However, stability in the rupee and the resumption of buying by foreign portfolio investors are likely to lend support to the market, analysts said.

"...with the earnings season set to commence, markets are expected to witness heightened volatility alongside stock-specific opportunities," Osho Krishan, chief manager of technical and derivative research at Angel One, said in a note. Tuesday, the Nifty 50 settled 0.1% lower at 24398.70, down 31.65 points from Monday's close. The BSE Sensex also ended 0.1% lower at 78180.72, down 104.35 points.

"Nifty (50) indicating buying interest continues to emerge at lower levels," Sundar Kewat, technical and derivatives analyst at Ashika Institutional Equities, said. "Among these, the 24000 mark remains the most critical support for the ongoing uptrend. As long as the index sustains above this support zone, the broader bullish structure remains intact. A sustained hold above these levels could pave the way for an advance towards 24800, followed by 25000 in the near term."

Information technology stocks will be in the spotlight for the next two weeks as they are expected to set the market's direction with their June quarter earnings. IT colossus Tata Consultancy Services will kickstart the June quarter earnings season by detailing its results Thursday.

TCS is expected to report a marginal sequential decline in its consolidated bottom line owing to annual salary hikes rolled out across the organisation from Apr. 1. However, its revenue for the quarter is expected to rise slightly, with the depreciation of the rupee against the dollar.

"We see FY27 as an inflection point, with the market over-discounting AI (artificial intelligence) risks for Indian IT amid geopolitical uncertainty," Anand Rathi Share & Stock Brokers said in an IT sector preview report. The brokerage sees AI-driven deflation and West Asia-led uncertainty as coupled headwinds weighing on the growth expectations for FY27.

Though the market is likely to remain sceptical of back-ended AI services monetisation, AI spending is expected to gradually shift from the infrastructure layer to the application and deployment layers, Anand Rathi said in the report. "Overall, Q1 (Apr-Jun) points to normalization rather than acceleration, with growth, margins and confidence all leaning on H2 FY27 (Oct-Mar); we stay positive on the sector longer term even as near-term conditions keep rewarding scale, execution and deep industry expertise," it said.

According to Axis Securities Equity Research, the IT services sector financial results are expected to remain soft in the June quarter, primarily because of macroeconomic headwinds, continued AI investments, and the impact of the West Asia conflict, resulting in steady deal wins and lower discretionary spending, especially in the US and Europe. The brokerage sees the near-term recovery being delayed for large IT players as AI adoption and delivery models are still at an emerging stage.

"With double digit earnings growth in last two years, valuations at a broad level are now better than two years back, making risk-reward more attractive," Vinay Paharia, chief investment officer at PGIM India Mutual Fund, said in a note. "While there exist certain pockets of speculative enthusiasm in the market, the prevalence of them is lesser than what was seen in FY24." He also expects earnings to improve in the second half of FY27, assuming the return to normalcy is sustained.

Broking firm Nuvama Institutional Equities anticipates the cumulative net profit of the Nifty 50 companies to rise 9% on year in Apr-Jun. For sectors like cement, pharmaceuticals, automobiles, chemicals, electronics manufacturing services, and fast-moving consumer goods, Nuvama sees profit being either flat or contracting, while companies in the metals, durables, non-banking financial company, and insurance sectors are expected to report an over 20% year-on-year profit growth.

The West Asia war is likely to affect the first half of FY27, with margins seen taking a hit due to higher input prices. "While margin headwind shall fade in H2FY27 (Oct-Mar), demand risks could rise as tax cuts, low base tailwinds fade, while El Nino risk emerges amid weak income," the brokerage said in its report. This is likely to result in a cut in earnings per share in FY27, according to the brokerage.

Monday, foreign investors net bought shares worth INR 2.43 billion while domestic investors net bought shares worth INR 37.91 billion. Foreign investors have turned net buyers for the past two sessions, supporting the equity market.  End

US$1 = INR 94.96

Edited by Rajeev Pai

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