The Indian stock market ended positively last week, with Sensex and Nifty showing significant gains. Six key factors are expected to influence market sentiment this week.
New Delhi, India Jul 5, 2026 ALN: The Indian stock market ended last week on a positive note, with the Sensex and Nifty overall rising nearly 0.9%. A sharp rally in the last three sessions erased all losses recorded in the first two days of the week.
On Friday, the Sensex gained around 262 points to close at 77,764, while the Nifty 50 rose more than 95 points to end the session above 24,270. These sharp gains added nearly Rs 44,155 crore to the total market capitalisation of all companies listed on the BSE, pulling it up to Rs 480 lakh crore.
Here are six key factors that could shape market sentiment in the week ahead, from July 6 (Monday) to July 10 (Friday).
Tata Consultancy Services (TCS), India's largest IT services company, is set to announce its results for the April-June quarter of FY27 on July 9. This will officially kickstart the Q1 earnings season for the IT sector and heavyweight large caps. According to Vinod Nair, Head of Research at Geojit Investments, the domestic earnings season will be a key factor shaping market direction in the upcoming week.
The current market scenario can be summarised as “no news is good news.” Peace efforts in the Middle East are holding well so far, with no escalation reported. This follows peace talks held between Iran and the US in Doha earlier last week. Iran is currently holding a days-long funeral for the late Supreme Leader Ayatollah Ali Khamenei, whose death earlier in March had sparked significant conflict. US President Donald Trump has claimed that Iran has conceded to nearly all American conditions in ongoing diplomatic negotiations, emphasizing that the primary objective remains preventing Tehran from obtaining nuclear weapons.
Oil prices inched up slightly to $72 per barrel on Friday but continue to hover near pre-war levels as peace efforts hold. Kuwait's oil production rose sharply to 1.65 million barrels per day in June from 580,000 bpd in May, as reported by Reuters. Additionally, at least five supertankers carrying around 10 million barrels of Saudi oil have exited the Strait of Hormuz, with Saudi Aramco switching to spot pricing to expedite sales in Asia. Falling oil prices are likely to provide much-needed relief to the market.
A significant positive trend in last week’s market recovery was the stellar performance of IT stocks. After tumbling around 6% in the first three sessions of the week, the Nifty IT index erased all losses and soared 6.5%. Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, noted that the Nifty IT index rebounded nearly 2%, extending its two-day gain to over 6% due to value buying following the recent correction and improving global technology sentiment.
The Rupee rose 13 paise to close at 95.22 against the US dollar on Friday, aided by a weaker US dollar following a tepid jobs report. Jateen Trivedi, VP Research Analyst at LKP Securities, noted that improved global sentiment and a softer dollar helped the domestic currency recover from recent weakness. However, traders remain cautious ahead of the weekend as developments in the US-Iran and Russia-Ukraine conflicts could influence global risk appetite. The rupee is expected to trade in the 95.00–95.45 range, with global developments and foreign fund flows as key drivers.
Foreign investors remained net sellers of Indian equities, net selling shares worth nearly Rs 312 crore on Thursday, according to provisional data on the NSE. This is marginal compared to the massive FII outflows seen earlier this year during the ongoing conflict in the Middle East.
With several overhangs easing during the week, Indian equities shifted from defensive caution at the start to growing optimism by the close. Vinod Nair highlighted that early in the week, skepticism over the durability of the US-Iran peace arrangement, muted expectations ahead of the upcoming earnings season, and a patchy start to the monsoon prompted profit-booking near key psychological levels. However, sentiment improved steadily as the week progressed.
Looking ahead, market direction will be shaped by the start of the domestic earnings season, monsoon progress, credit growth trends, and ongoing trade negotiations with Japan, the UK, and the US. While risks persist amid downward revisions to earnings growth estimates and monsoon-related inflation concerns, much of the visible uncertainty appears to be priced in, leaving room for a constructive read on incremental positives. The broader bias remains buy-on-dips, with a preference for large caps given their relative earnings resilience and attractive valuations.
Indian equities are expected to maintain a gradual uptrend, supported by favorable global cues and easing concerns over the US interest rate outlook. Khemka noted that ongoing June-quarter business updates are likely to drive stock-specific action, while investors will closely monitor the southwest monsoon after June rainfall remained 40% below the Long Period Average.
Sectoral focus is expected to remain on Defence and Refining. Defence stocks are likely to remain in focus ahead of the Defence Acquisition Council meeting, where procurement proposals worth over Rs 1 lakh crore are expected to be considered. Refining companies may also attract attention following reports of higher refined fuel exports, highlighting India's growing role in global energy supply chains.
Nifty has registered a consolidation breakout on the daily chart, indicating improving market sentiment, said Rupak De, Senior Technical Analyst at LKP Securities. The index continues to sustain above the crucial 50-day EMA, reinforcing the positive short-term trend. The RSI has also witnessed a bullish crossover, adding further strength to the momentum. Going forward, Nifty appears well-positioned to advance towards 24,500 and potentially higher, with immediate support placed at 24,200, followed by a stronger support zone around 24,000.
(With inputs from agencies)
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