Indian equity markets endured a turbulent last-week

The Indian stock market endured a turbulent week, ending on 18^th July. This week was characterized by sustained selling pressure from Foreign Institutional Investors (FIIs) and cautious sentiment driven by global uncertainties and the commencement of the corporate earnings season.

Geopolitical concerns added another layer of uncertainty

Geopolitical concerns added another layer of uncertainty, with potential disruptions to cheap Russian oil supplies due to threatened U.S. and NATO sanctions over the Ukraine conflict keeping investors on edge. The European Union’s approval of a new sanctions package against Russia—including a lower oil price cap on Russian exports, transaction bans related to the Nord Stream gas pipelines, and targeting of additional shadow fleet vessels—further contributed to market anxiety.

Start of Q1 results season prompted a wait-and-watch approach

The start of Q1 FY26 earnings results prompted a “wait-and-watch” approach among investors as they sought clarity on corporate performance. Early earnings reports from IT majors, particularly TCS, revealed weakness that weighed heavily on the entire technology sector.

Mid and small-cap stocks showed resilience

Market indices reflected this cautious mood, with the Nifty 50 declining 0.7% for the week to settle below the psychologically important 25,000 mark. The BSE Sensex mirrored this weakness, falling 0.9%. However, mid and small-cap segments showed resilience, with the BSE Mid-Cap index advancing 1.04% to close at 46,775.77, while the BSE Small-Cap index gained 1.46% to end at 55,285.44.

FIIs continued with their selling

Foreign fund flows remained a key pressure point, with FIIs continuing their selling streak by offloading equities worth Rs 6,672 crore according to provisional data. Domestic Institutional Investors (DIIs) provided crucial support, purchasing equities worth Rs 9,491 crore, effectively offsetting the foreign outflows.

Sectoral performance was predominantly negative, reflecting broad-based selling pressure amid cautious investor sentiment and disappointing corporate earnings. Banking and IT sectors bore the brunt of the decline following weak Q1 results from major companies. Defensive sectors, including Pharma, FMCG, Capital Goods, Consumer Durables, and Telecom, also retreated between 0.5% and 1%. However, the Metal and Media sectors bucked the overall downtrend, posting gains and demonstrating relative resilience.

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Source: HDFC Securities Prime Research