Earnings season takes centre stage for markets

Heavyweights including RIL, HDFC, ICICI, Axis, Wipro and HCL will be in focus. Track management commentary and brokerage reactions for cues. Starting July 13, three IPOs worth over Rs10,100-cr including the mega SBI Funds Management will go live

Quote of the week:

The most contrarian thing of all is not to oppose the crowd but to think for yourself

—Peter Thiel

C Kutumba Rao

Despiteweak global cues, a weaker rupee, elevated international crude oil prices and renewed FII outflows; supported by strong buying in IT stocks following better-than-expected earnings from heavyweight companies, Indian market put up a resilient show during the week ended.

The Sensex climbed 582.06 points, or 0.75 per cent, to close at 78,151.45, while the Nifty advanced 127.4 points, or 0.52 per cent, to settle at 24,334.30. In the broader market, the Nifty Smallcap 100 and the Nifty Midcap 100 shed 0.6 per cent and 1 per cent respectively.

Renewed selling was seen from FIIs, offloading equities worth Rs 9,119.76 crore during the week ended. In contrast, DIIs extended their usual support, investing Rs 9,808.64 crore. The Indian rupee extended its losing streak for a fourth consecutive week, ending 96 paise weaker at 96.28 against the US dollar on July 17, compared with 95.32 on July 10.

The benchmark indices declined nearly10 per cent in the first half of calendar year 2026 (H1CY26), the worst first-half decline since 2020, when Covid-19-led disruptions rattled markets. Turbulence was a constant during the last six months as markets grappled with one headwind after another.

Meanwhile, Small and Mid-cap indices outperformed their large-cap peers during the period. The Nifty Smallcap 100 index gained 6.5 per cent, while the Nifty Midcap 100 index moved up 2.2 per cent in H1CY26. The key reason for the outperformance of small- and mid-cap stocks in H1, is that they mostly escaped FPI selling, which was largely concentrated in the large-cap segment.

RBI Governor’s statement that India’s inflation remains elevated with ongoing tensions in West Asia and prospects of a weak monsoon season seen as key risks for the economy is clear warning signal for economy. It is pertinent to understand that the stakes extend far beyond agriculture. The quality and distribution of the rains could determine food inflation, rural demand, consumer spending and the broader economic outlook.

Inflation rose above the central bank’s 4 per cent target for the first time in nearly a year and a half. Food inflation, El Niño risks make rate cuts unlikely from RBI in near term. Gold managed to close above $4,000 per ounce but still posted a weekly loss of 2.5 per cent; its weakest since November 2025. The moderation in CPI numbers in US offered a brief lift to bullion midweek, but renewed conflict escalation quickly reasserted the inflation and higher-for-longer narrative, pressuring non-yielding assets.

Gold’s trajectory now depends on whether energy costs feed durably into consumer inflation expectations. Reliance Industries Ltd (RIL) reported a stronger-than-expected performance for the June quarter, with double-digit growth across its key businesses–oil-to-chemicals (O2C), digital services and retail–helping the conglomerate weather one of the biggest energy-market shocks in recent years.

Weekend results of large private banks, HDFC, ICICI and Kotak Mahindra were in line with expectations. The earnings calendar of week ahead includes key companies like Paytm, Bajaj Auto, TVS Motor, Adani Power, BPCL, Eternal, IndusInd Bank, HPCL, UltraTech Cement, Infosys and Bank of Baroda. In coming weeks, markets are likely to take cues from the proposed India-US trade deal, developments in West Asia and domestic factors such as the progress of the monsoon, inflation, interest rates and Q1 corporate earnings. While observers expect quality Mid and Small-cap stocks to continue outperforming, elevated crude oil prices and the possibility of some earnings downgrades could keep markets range-bound.

Simply seeing that a trend has gone too far or that a particular industry is stagnating seldom produces good returns. To really be different, you have to do something new. New ideas are the best and most profitable way to be a contrarian.

FUTURES & OPTIONS / SECTOR WATCH

Mirroring the resilience in the underlying cash market; derivative segment witnessed brisk trading. Ahead of the settlement week, a sharp decline in the open interest of July futures was observed, reflecting “caution” among market players. Combined FII-Retail net short positions in index futures declined 17 per cent reflecting lower bearish exposure. In the back drop of Q1 results season, lack of follow up buying was seen at higher levels. In the options segment, strong Call open interest for Nifty was observed at the 25,000 and 24,700 levels while major Put open interest was concentrated at the 24,200 and 24,000 levels. For Bank Nifty, significant Call open interest was seen at 59,000 level whereas notable Put open interest was also placed at the 58,000 level indicates an important level for upcoming sessions. Implied volatility (IV) for Nifty’s Call options settled at 12.33 per cent while Put options concluded at 13.47 per cent.

The India VIX, a key indicator of market volatility concluded the week at 12.88 per cent. The Put-Call Ratio Open Interest (PCR OI) stood at 1.05 for the week. Immediate resistances for Nifty are at 24400 and 24500. Supports are at 24000 and 23800. F&O data reflects constructive outlook for Bank Nifty. Immediate resistances are at 59000 and 60000; supports are evident at 58300 and 57500. Buying interest in IT stocks and select large-cap companies helped the market recover from lower levels.

Traders are advised to follow a buy-on-dips strategy as long as Nifty holds above the 24,000 mark. Punters would do well to track developments over the escalating US-Iran conflict, a weakening rupee, and rising crude oil prices.

Stocks looking good are Bharat Forge, Biocon, Eicher Motors, Hyundai, ICICI Bank, Tech Mahindra, Prestige and Paytm. Stocks looking weak are BDL, D Mart, GVT&D, IREDA, MFSL, NALCO and Tata Elexi.