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Informist, Monday, Jul. 20, 2026

By Arundathi A R

MUMBAI – Though sentiment in the domestic equity market soured a little Monday and the benchmark indices closed lower with Brent crude oil going past $90 a barrel, analysts do not expect the indices to continue falling in the near term. The Nifty 50, which closed above 24200 points, is expected to maintain a largely positive sentiment. Analysts see the equity market reacting less and less to any fresh escalation in the war and consequent rise in crude oil prices, as the volatility in oil prices has been priced in, what with all the flip-flops in the US-Iran negotiations. They see the June quarter earnings being the major factor to influence the sentiment.

According to news reports, the war between the US and Iran escalated after two US military personnel were killed Sunday and the US began sending more warplanes to West Asia. The US military said Sunday evening it had begun a new wave of strikes on Iran, the ninth consecutive night of such strikes. With no sign of a diplomatic end to the war, the ceasefire reached last month now exists only in name. US President Donald Trump said the latest strikes by the US hit Iran "very hard", adding that the attacks were "in honour" of three US soldiers killed in recent days--two in Jordan and one in Iraq, BBC reported.

Monday, the Nifty 50 settled at 24238.50 points, down 95.80 points or 0.4% from Friday. The BSE Sensex ended at 77708.52 points, down 442.93 points or 0.6% from Friday. "Nifty (50) has a support in the range of 24100-24000," Ruchit Jain, technical research head at Motilal Oswal Financial Services, said. "Till this support is intact, it remains a buy-on-dips market. On the higher side, the index has potential to rally towards 24500 in the near term." Jain does not see the fall in the equity market continuing. "There can be a reversal for 24500 (points)," he said. "View is sideways to positive till Nifty is above 24000."

"If crude oil prices go to a triple digit number, we can expect the market to witness a sharp correction," Sunny Agrawal, head of fundamental equity research at SBICAPS Securities, said. Otherwise, he sees the fall being limited in the coming days and expects the index to consolidate within a range. At 1640 IST, the September futures contract of Brent Crude was largely flat at $88.12 a barrel.  

According to Moody's Ratings, the equity markets are dispersing with capital reallocation towards durable, policy-backed growth. "US markets have largely shrugged off elevated geopolitical tensions, persistent trade policy uncertainty and increasingly concentrated valuations in large technology names, anchored by a strong earnings season and sustained optimism around AI-driven (artificial intelligence-driven) productivity gains," it said. Investors are focusing more on free cash flow generation, pricing power, balance sheet strength, and capital efficiency, the rating agency said.

Nifty 50 automobile major Bajaj Auto is expected to clock a 20-quarter-high growth in revenue for the June quarter, owing to strong growth in wholesale sales and a slight increase in the average selling price of its vehicles. The company's net profit for the quarter is seen at INR 27.89 billion, which would translate to a 33% year-on-year rise. Its top line for the quarter is expected at INR 170.44 billion, up 35% on year.

"India can absorb 2–3% pa (per annum) INR (rupee) depreciation; what hurts markets is rise in depreciation intensity vs the previous year," Elara Capital said in its strategy report. "Since CY08 (calendar year 2008), years of worsening FX (foreign exchange) impulse saw Nifty50 returns compress by a median 16ppt (percentage points); on the other hand, easing FX stress led to a median 17ppt recovery. Thus, INR depreciation is both a macro and flow signal. If the pace moderates hereafter, dollar return risk for FII (foreign institutional investment) should reduce and support a beta-led recovery in the next 12–18 months," the broking firm said.

Agrawal said, "Already the tide has turned, and we have seen few positive inflows to the market in the past few trading days." He expects foreign investors to turn buyers once crude oil prices soften and the rupee stabilises. Friday, they net sold equity shares of INR 3.76 billion while domestic investors net bought shares worth INR 10.18 billion.

"We remain constructive on the market outlook and continue to advocate a 'Buy on Dips' strategy in the prevailing market environment," Osho Krishan, chief manager of technical and derivative research at Angel One, said in a note. "Investors should closely monitor geopolitical developments and the evolving macroeconomic landscape as these are likely to influence near-term sentiment. At the same time, with the earnings season underway, a stock-specific approach focused on thematic opportunities is expected to outperform the broader market."

The rupee settled at a two-month low of 96.4450 Monday on escalation in the war in West Asia. "Market participants are now shifting their focus to the US Federal Reserve's interest rate decision on 29 July, which will be a key driver for the US dollar and emerging market currencies," Jateen Trivedi, research analyst of commodity and currency at LKP Securities, said in a note. "Until then, the rupee is expected to remain under pressure, with a weak bias likely to persist in the near term."  End

US$1 = INR 96.4450

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

Edited by Rajeev Pai

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