Indian equities ended lower after four straight gains as profit booking and weak global cues weighed on sentiment. Analysts expect earnings and foreign inflows to guide market direction.
New Delhi, India Jul 7, 2026 ALN: The Indian stock market recently experienced a setback, snapping a four-day streak of gains as both the Sensex and Nifty indices closed lower on Tuesday. This decline, albeit muted, was influenced by a combination of factors, including weak global cues and a slight uptick in oil prices, which overshadowed a stronger rupee and positive foreign institutional investor (FII) activity.
The Sensex, a key benchmark index representing 30 of the largest and most actively traded stocks on the Bombay Stock Exchange, fell by more than 104 points, closing at 78,181. Similarly, the Nifty 50, which tracks the performance of the top 50 companies listed on the National Stock Exchange, declined by approximately 32 points, ending the day at around 24,399. This downturn wiped out all the gains made during the morning session, reflecting a volatile trading environment. Broader market indices also followed suit, with the Nifty Smallcap 100 declining by 0.66% and the Nifty Midcap 100 dropping by 0.37%.
Market analysts attributed the decline to profit booking that emerged in the latter half of the trading session, following a period of gains. Vinod Nair, Head of Research at Geojit Investments, noted that investor caution was heightened ahead of the release of the US Federal Reserve's minutes, which typically provide insights into the central bank's monetary policy direction. Furthermore, weakness across Asian added to the negative sentiment.
Despite the overall bearish trend, Nair highlighted that IT stocks continued to show resilience, extending their gains as the market approached the June-quarter earnings season. This recovery in the IT sector came after a period of corrections, suggesting that investors were positioning themselves for potential positive earnings reports. "With concerns around the US–Iran conflict and trade tariffs easing, market focus is shifting towards Q1FY27 earnings and the progress of the monsoon. Meanwhile, improving FII inflows and a stable rupee are expected to provide near-term support to overall market sentiment," Nair added.
The performance of the Indian stock market was also influenced by global developments, particularly in the United States. The S&P 500 index slipped, and the Nasdaq experienced a sharper decline, primarily driven by losses in semiconductor stocks. This downturn occurred amid growing doubts regarding the sustainability of the AI-led rally in the tech sector, despite robust earnings reported by Samsung. A report detailing China's DeepSeek developing an AI chip further dampened investor sentiment.
Notably, Nvidia, a key player in the semiconductor industry, saw its shares fall by 1.8% as news emerged about the Chinese startup's advancements, which could potentially lessen its reliance on Nvidia and Huawei chips. This news contributed to a broader sell-off in chip stocks across Wall Street, with the Philadelphia SE Semiconductor index declining by 5.5%, marking a four-week low. Major companies like Intel and Micron also faced significant losses, with their shares sinking by 8.2% and 7.3%, respectively, making them some of the top losers on the S&P 500.
European mirrored the downturn seen in the US, with stocks taking a step back despite positive earnings from major companies like Samsung Electronics. The company forecasted a staggering 19-fold increase in its operating profit for the April-June period, amounting to 89.4 trillion won (approximately $58.4 billion). This marked the third consecutive quarter of record operating profit for the world's largest memory-chip maker. However, the overall European market, represented by the STOXX 600 index, slipped by 0.16%, as losses in semiconductor and technology stocks overshadowed gains in oil and gas shares, which benefited from rising crude prices amid indications that U.S.-Iran peace talks were stalling.
From a technical perspective, the Nifty index opened positively and extended its gains during the first half of the trading day, primarily due to strength in the IT sector. However, it failed to maintain its position above the 24,500 mark, leading to a sharp profit booking in the latter half of the session, as noted by SBI Securities. Consequently, the Nifty pared its intraday gains and settled near the 24,400 level, resulting in a marginal loss of 0.13% for the day.
On the daily chart, the Nifty formed a small-bodied candle with shadows on both sides, indicating a state of indecisiveness in the current market environment. Despite the day's weakness, the index continues to trade above its 20-day, 50-day, and 100-day exponential moving averages (EMAs), reflecting an overall positive trend. The daily Relative Strength Index (RSI) remains in bullish territory, suggesting that there may still be room for upward movement.
Looking ahead, analysts are eyeing the 24,530–24,550 zone as an immediate resistance area for the Nifty. A decisive breakout and sustained move above 24,550 could trigger fresh buying interest, potentially paving the way for a sharp upside rally towards levels of 24,700 and 24,850 in the short term. Conversely, the 24,300–24,280 zone is seen as a crucial support area for the index. As long as the Nifty holds above this support band, the broader bullish undertone is likely to remain intact, providing a level of reassurance to investors.
In terms of market activity, several stocks stood out in terms of turnover. HDFC Bank led with a turnover of Rs 4,805 crore, followed by Trent (Rs 2,704 crore), RITES (Rs 2,384 crore), ICICI Bank (Rs 2,226 crore), BSE (Rs 2,088 crore), Infosys (Rs 2,028 crore), and Reliance Industries (Rs 1,884 crore). High trading activity in these counters can indicate investor interest and potential volatility.
In terms of volume, Vodafone Idea topped the charts with 38.25 crore shares traded, followed by RITES (10.07 crore), Ola Electric Mobility (7.98 crore), Yes Bank (6.2 crore), HDFC Bank (5.76 crore), Suzlon Energy (5.7 crore), and Physicswallah (5.67 crore). These figures highlight the stocks that attracted significant attention from traders.
Stocks that showed buying interest included Info Edge, Physicswallah, RITES, Swiggy, Natco Pharma, Latent View Analytics, and Aegis Vopak Terminal, indicating potential bullish sentiment in these companies. Conversely, stocks that faced selling pressure included Trent, Kalyan Jewellers, Emmvee Photovoltaic, Himadri Speciality, Saregama India, Data Patterns (India), and R R Kabel, reflecting a bearish outlook among investors.
In a broader market sentiment overview, out of the 3,384 stocks that traded on the National Stock Exchange (NSE) on July 7, 1,191 stocks witnessed advances, while 2,084 saw declines, and 109 stocks remained unchanged. This sentiment meter indicates a prevailing bearish trend in the market, suggesting that investors are exercising caution in their trading decisions.
The fluctuations in the stock market are often influenced by a myriad of factors, including indicators, geopolitical developments, and corporate earnings reports. As the market continues to navigate these complexities, investors are advised to remain vigilant and informed, particularly as key earnings reports and data are expected to be released in the coming days.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own and do not represent the views of the publication.)
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