Mumbai: Last week’s euphoria on Dalal Street appears to have cooled, even as global indices outperformed Indian benchmarks. While optimism around US–Iran peace talks lent support, investor activity remained selective, driven more by stock- and sector-specific bets than broad-based momentum.
The Nifty 50 and Sensex rose over 1% this week, extending gains after last week’s near 6% surge—their strongest in over five years—but the pace has now moderated. On Friday, both indices closed about 0.65% higher, with the Nifty at 24,353.55 and the Sensex at 78,493.56.
Globally, the rally has been far stronger. South Korea’s KOSPI jumped around 6%, the Nasdaq gained over 5%, while markets in Indonesia, Taiwan and Japan rose 2-4%.
Karan Aggarwal, co-founder & CIO at Ametra PMS, a quant-based PMS & portfolio manager, said global markets are being lifted by an AI-driven rally led by Korea, Japan, Taiwan and the US tech sector— something largely absent in India.
“India faces twin headwinds of high valuations and EPS re-rating risk, with NSE 500 at 24x P/E and ~10% EPS growth, while muted IT outlook and lower banking treasury income weigh on sentiment,” he said. EPS is short for earnings per share.
Sectoral rotation continues
The market action during the week reflected a shift towards sector-specific opportunities rather than broad-based participation.
Power stocks led gains, with the BSE Power index rising 6.8%, followed by capital goods (up 5.4%) and metals (over 4%), aided by global cues. Auto stocks, however, remained weak, with BSE Auto index slipping about 0.5% on muted demand expectations.
Aggarwal noted that these moves are largely technical and do not indicate any fundamental shift.
“Capex-heavy sectors such as defence and realty saw sharp corrections in March, with some stocks falling 25-40% due to rising yields,” he said. “As yields cool off globally, investors are using the opportunity to accumulate at lower levels. Metals, meanwhile, are benefiting from the weakness in the US dollar index, which has declined about 2% over the last 10 sessions.”
Earnings season in focus
Attention has now shifted to earnings, which has so far delivered a mixed picture, particularly in the IT sector.
Tata Consultancy Services reported Q4FY26 consolidated revenue of $7.73 billion, rising 3% sequentially, while net profit stood at $1.5 billion, slightly down 1% compared to the previous quarter.
Wipro, however, showed a more muted performance, with revenue at $2.65 billion, growing just 0.2% quarter-on-quarter, and net profit at $382.8 million, up 9%.
“IT also looks split rather than broken,” said Harshal Dasani, business head at INVasset PMS, adding that while TCS delivered good quarterly results, “Wipro’s soft guidance reminded the Street that demand recovery remains uneven”.
Notably, Wipro said on Thursday that it expects a weak start to FY27, guiding for April-June revenue of $2.6–2.65 billion—a sequential decline of up to 2% or flat growth, due to delays in ramping up a large client and slower growth from an existing banking client.
Outlook
With earnings still unfolding and macro risks in play, markets are expected to remain range-bound in the near term.
Aggarwal said upcoming results from HDFC Bank and ICICI Bank would be key, especially in assessing treasury performance amid volatile yields, and a strong performance could push the Nifty 50 towards 25,000.
However, he added, “One has to accept the harsh reality that as EPS-re-rating is still a few quarters away, present valuation levels indicate markets are near the upper band of the range, and any disappointment in banking sector results can push markets back below 23,300 levels.”