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Informist, Friday, Jul. 24, 2026

 

By Gopika Balasubramanium

 

MUMBAI – The bearish sentiment is likely to prevail in the Indian stock market next week as crude oil prices ballooned to $100 a barrel and renewed concerns over rising import bills and the impact on currency. US President Donald Trump imposed new tariffs in the range of 10-12.5% on at least 60 of the US' trading partners, including India and China, claiming that they have inadequately banned goods produced by forced labour. Consistent selling by foreign investors has also affected sentiment. Analysts do not expect them to buy Indian stocks as long as the rupee remains unstable.

 

"The short-term trend of Nifty has turned down sharply, but the medium- to long-term uptrend remains intact," Nagraj Shetti, senior technical analyst at HDFC Securities said in a note. "There is a possibility of minor bounce towards the immediate resistance of 24200 levels by next week before turning down again. Immediate support is at 23600," he added.

On Friday, the 50-stock index settled at 23767.45 points, down 102.15 points, or 0.4%. The index fell to as low as 23606.30 points during the day, very close to the crucial support level of 23600 points. A breach of this level could have dragged the index down to 23500 points, technical analysts said. 

 

According to fund managers, June quarter earnings have not been so disappointing and largely defied initial expectations of contraction in margins. The companies have more or less managed to overcome the cost impact, but the impact could be more severe if the war in West Asia continues and there is volatility in crude oil prices. Oil marketing companies, however, posted losses for the June quarter as they could not limit the impact of the spike in crude oil prices. These companies have so far hiked prices of diesel and petrol by over INR 7 a litre to protect margins. 

 

The sudden spike in crude oil prices has also raised concerns about a rate hike by the US Federal Open Market Committee in the September meeting. While there are no expectations of the Reserve Bank of India raising rates in August, some analysts pointed out there may be a rate hike by the end of the financial year. Some others expect India to not resort monetary policy as the government has taken all the impact of West Asia war through fiscal measures.    

 

Analysts pointed out that rupee would be the single largest deciding factor for foreign investors to return to India. They said trends in earnings growth would also be monitored, but it is the stability of the Indian rupee that would move the needle for them. "Foreign investors would come to India when they see some stability in the rupee," said Harini Dedhia, fund manager at Tamohara Investment Managers. "And the currency's movement is closely related to import bill, which would be steady only if volatility in crude oil prices eases," she said.

 

Currency is a big factor for foreign investors, and one cannot expect them to come and buy, she said. "Now, if rupee recently has just given you that experience of taking 10-12% returns away in a six-month time frame, why would anyone take that risk," Dedhia said. The Indian currency has depreciated over 7% so far in 2026 and fell to a record low of 96.96 a dollar. This was because the banks bought dollars on behalf of importers as crude oil prices jumped due to disruption in fuel supply globally amid escalation in West Asia military conflict.  End

 

Edited by Deepshikha Bhardwaj

 

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