Pulse of the Street: Earnings sentiment rescues volatile week; real test ahead

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Indian equities closed a volatile week with modest gains, led by a sharp Friday rally as investors ultimately shrugged off renewed West Asia tensions and stepped up purchases on strong June-quarter earnings.

The 30-share Sensex rose 0.75% for the week, while the broader Nifty 50 gained 0.53%, with most of the gains coming on Friday. The Nifty jumped 1.1% to close at 24,334.30, while the Sensex advanced 1.25% to settle at 78,151.44, its highest closing level since 12 June 2026.

Investors remained on edge for much of the week as fresh hostilities between the US and Iran, less than a month after an interim peace deal, pushed crude oil prices higher and weighed on the rupee. Crude oil soared past $85 a barrel from about $75 in the previous week, stoking concerns over inflation and India’s import bill. The rupee hovered near a more than one-month low of around ₹96.3 against the dollar.

Strong earnings supported the market even as investors become more selective, Feroze Azeez, joint chief executive at Anand Rathi Wealth, said. ”FIIs (foreign institutional investors) were net sellers of around ₹6,000 crore during the week, but DIIs bought more than ₹10,000 crore, absorbing much of the selling pressure and helping the broader market remain stable”, he added.

Technology shares led the earnings-driven rebound, with the BSE Information Technology index gaining 3.83%. This was followed by the consumer durables pack, which rose 2.3%, while oil and gas and energy stocks advanced nearly 1% each.

The gains, however, remained narrow, with laggards outnumbering the leaders. The BSE Realty index fell the most, around 2%, while metals declined 1.7%. Telecommunications, capital goods and FMCG indices lost more than 1% each.

Rajesh Singla, chief executive and fund manager at Alpha AMC, said the sharp outperformance of IT relative to the broader market indicated sector rotation rather than widespread risk-aversion. “IT was oversold after a weak FY26, and encouraging results from major technology companies have brought investors back. Weakness in realty, metals and FMCG appears to be profit-booking rather than broad-based caution,” he said.

“When the Nifty is flat and only a few sectors move, it signals rotation rather than caution. Profit-booking is visible in rate-sensitive sectors that have already rallied, while money is shifting into beaten-down pockets such as IT,” said Anand K. Rathi, co-founder of Mira Money.

Compared to global equities, Indian equities delivered a mixed performance, with the Nifty 50’s modest weekly gains lagging peers in Indonesia, Hong Kong and the UK, where benchmark indices advanced between 0.7% and 4%.

India, however, outperformed other emerging market peers such as Brazil, Taiwan, and South Korea, which declined up to 9%.

Azeez said that India’s relatively diversified earnings base helped it remain resilient compared with markets such as Taiwan and South Korea, which are more dependent on semiconductor stocks, which took a massive hit globally this week.

“India’s growth is spread across banking, consumption, manufacturing, healthcare and IT services, reducing its dependence on any single sector,” he said, adding that continued earnings growth could support the market over the medium term.

Early corporate earnings appear to validate this outlook. A Mint analysis of 132 listed companies that have declared first-quarter results so far showed aggregate revenue rose 19.7% year-on-year, while net profit increased 23.4%.

This marked a significant improvement from the April-June quarter of FY26, when the same sample of companies reported a revenue growth of 3.6% and a profit increase of 14.2%.

While revenue growth followed an upward trajectory through FY26, net profit growth contracted in the second and third quarter before recovering to 7.9% in the March quarter of FY26.

Analysts, however, cautioned against reading too much ...