Indian stocks lost ground this week as uncertainty over the Tata Group’s leadership transition added to pressure on domestic benchmarks, even as an artificial intelligence (AI)-fuelled rally lifted major Asian markets.
The Sensex fell 0.09% on Friday to 78,009.25, while the Nifty 50 declined 0.12% to 24,366.00. For the week, the two indices lost 0.6% and 0.8%, respectively.
Investor sentiment was weighed by Tata Sons chairman N. Chandrasekaran’s decision not to seek another term, raising questions over succession and governance at India’s largest conglomerate. The combined market capitalization of Tata Group companies fell nearly 2% on Wednesday after the announcement.
The group’s market value has declined nearly 6% so far in 2026, amid pressure on heavyweight companies, global uncertainty and market volatility.
Selective buying
The broader market remained a stock-picker’s market, with gains concentrated in a handful of sectors. The BSE Telecommunication index rose 3.7% during the week, leading the gainers, followed by Realty, up 1.3%. Consumer Durables and Capital Goods each advanced 1.1%.
Metal was the weakest-performing sector, with the BSE Metal index falling 1.4%. FMCG declined 1%, while Energy and Information Technology fell 0.8% and 0.6%, respectively.
“Buying in the Indian market has become increasingly selective, with investors favouring pharmaceuticals, telecom, realty and consumer durables. Beyond the Nifty 50, we see opportunities in mid- and small-cap stocks, particularly in select pharmaceutical, auto-ancillary and capital expenditure-linked companies,” said Prasenjit Paul, fund manager at 129 Wealth and research analyst at Paul Asset.
“The IT sector may remain volatile amid the ongoing rally in AI stocks, but early signs suggest that a bottom may be forming. Any meaningful correction could offer a buying opportunity. Defence and precision engineering also look attractive following the June-quarter earnings season,” said Santosh Meena, head of research at Swastika Investmart Ltd.
India trails Asian peers
Indian equities underperformed several major Asian markets as an AI-, and semiconductor-led rally lifted technology-heavy indices across North Asia. The Nifty 50 fell 0.8% for the week, compared with an 11.5% surge in South Korea’s Kospi, a 4.7% gain in Japan’s Nikkei 225 and a 3.6% rise in Taiwan’s Taiex.
India nevertheless outperformed Hong Kong’s Hang Seng and Brazil’s Bovespa, which declined 2.1% and 3.1%, respectively.
“The Nifty’s weekly decline appears less worrying in the context of the earnings season. Profit growth among the 39 Nifty companies that have reported stands at 11%, ahead of the Street’s 7% estimate. This week’s weakness reflects higher crude oil prices and uncertainty over Tata Sons’ leadership rather than deteriorating fundamentals,” said Lokesh Manik, senior analyst at Vallum Capital.
“BFSI, metals and technology companies have driven earnings growth, while headline automobile and consumer companies have remained relatively weak. The rallies in Taiwan and South Korea were largely driven by flows into AI and semiconductor stocks.”
“India underperformed North Asian markets mainly because its benchmarks have limited exposure to the AI and semiconductor rally. Elevated valuations, oil-price volatility and weaker earnings momentum among some heavyweights also restricted gains. The gap could narrow if global capital rotates towards domestically driven markets,” Meena said.
“Resilient domestic institutional buying and a tentative return of foreign investors could support Indian equities. However, the divergence may persist while global momentum remains concentrated in North Asian technology stocks and geopolitical tensions keep crude oil prices elevated,” he added.
Stock-specific moves
Finolex Cables surged 21.7%, supported by strong volume-led growth across its cables and wires businesses. Improving fibre prices and demand from data centres, solar projects and automobiles prompted Anand Rathi to retain its ‘Buy’ rating and raise the target price to ₹1,037 from ₹975.
Gland Pharma gained 14.9% after its Q1FY2027 profit of ₹317 crore and revenue of ₹1,800 crore exceeded analyst estimates. Jefferies upgraded the stock to ‘Buy’ and raised its target price to ₹3,350 from ₹2,080.
One97 Communications, Paytm’s parent company, advanced 11.3% after Bernstein retained its ‘outperform’ rating and raised its target price to ₹2,200, citing an improving profitability and growth outlook.
Among the laggards, Power Finance Corp. Ltd fell 10.1% after loan growth slowed to 4% and net interest income missed analyst estimates. PhysicsWallah declined 10.9%, while Aditya Birla Fashion and Retail fell 11.6%. ABFRL’s revenue met expectations, but its operating performance fell short of estimates, according to Systematix Institutional Research.