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Informist, Friday, Jul. 31, 2026

By Gopika Balasubramanium

MUMBAI – Analysts maintained their positive outlook on the Indian stock market for the near term on the back of a relatively stable rupee, buying interest from foreign investors, and better June quarter earnings. While the situation in West Asia and the movement in crude oil prices will be closely tracked, some analysts believe market sentiment will not sour unless the rupee weakens. Traders will react to the Apr-Jun results of Nifty 50 companies such as ITC and Maruti Suzuki India that were announced after market hours Friday. Traders will also track the monthly wholesale sales volume data for July from major automobile companies.

"If situation (in West Asia) worsens from here, there could be some fall in the market. Otherwise, with these escalations, it is unlikely that there would be sharp movement," Nandish Shah, senior technical analyst at HDFC Securities, said. "The movement of the rupee is key, everyone is watching. If it behaves normally even when crude rises and is stable, the market would also be steady," he added. Shah expects the resistance at 24530-24778 points for the Nifty 50 next week. Meanwhile, technical analysts see the index taking support at 24200 points.

Friday, the Nifty 50 settled at 24383.60 points, up 66.45 points or 0.3%. While the index gained over 2% for the month, it has not managed to cross the resistance of 24500 points polled by Informist for July. But, it closed above the support of 23700 points. Barring the indices tied to information technology, fast-moving consumer goods, and consumer durables, all other major sectoral indices closed higher Friday. Meanwhile, the BSE Sensex closed at 78094.64 points, up 166.49 points or 0.2%. Broader market indices outperformed benchmark indices Friday. The Nifty Smallcap 250 index gained 3%, and so did the Nifty Midcap 50.

"While the USD/INR (rupee) (is) hovering near 95.42 (a dollar) and Brent Crude consolidating around $87/bbl (barrel) demand cautious vigilance on the imported inflation front, strong domestic institutional buying and robust bluechip buying have established a solid market floor," Vinit Bolinjkar, head of research at Ventura Securities, said in a note. "The near-term outlook remains constructively bullish as investors price in healthy earnings momentum and strengthening macro-liquidity," he added.

Further, the Reserve Bank of India's Monetary Policy Committee will meet next week to decide on the trajectory of its key policy rate. This week, the central banks of the US, the UK, and Japan kept their key interest rates unchanged. However, the decision was not unanimously taken as some policymakers within the respective committees had recommended a hike. They held the key policy rates unchanged on concern over inflation in the near term due to the war in West Asia. The Bank of England has said it is ready to raise its policy rate if the war escalates.

The RBI is widely expected to hold the repo rate at 5.25% and maintain a neutral policy stance Wednesday, amid uncertainty over the impact of the war in West Asia and the El Nino condition on economic activity and inflation. Most economists polled by Informist said keeping the policy stance unchanged at neutral will give the rate-setting panel flexibility to respond to any future shock arising from the war. The committee had left the repo rate unchanged at 5.25% in the last three meetings after lowering it by 125 basis points in 2025.

"In our view, the RBI is likely to revise its inflation forecast modestly lower, reflecting crude oil prices that are now below the $95/bbl assumption prevailing in the June meeting," Goldman Sachs said in a note. "We expect them to keep growth projections unchanged to slightly higher, reflecting firmer incoming activity data," it said.  End

US$1 = INR 95.38

Edited by Shubhayan Bhattacharya

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