Indian benchmarks slip on Iran tensions as midcaps outperform
A four-week rally in India's benchmark indices ended marginally lower due to geopolitical risk and oil prices, but strong midcap performance and robust earnings previews signal sustained domestic resilience.
Indian equities snapped a four-week winning streak, with the Sensex falling 0.25% to 77,569.39 and the Nifty 50 dropping 0.26% to 24,206.90. The marginal declines in the benchmark indices masked broader market strength, as midcap and smallcap indices advanced more than 1% each. This divergence underscores continued stock-specific buying beyond large-cap names.
The week's price action was dictated by shifting geopolitical winds. Early gains fueled by softer crude prices, steady monsoon progress, and strong quarterly updates evaporated mid-week when escalating US-Iran tensions triggered a sharp sell-off. However, better global cues and stronger-than-expected results from TCS drove a significant recovery in the final two sessions, setting a constructive tone for the Q1 FY27 earnings season.
Looking ahead, market participants are prioritizing corporate earnings and inflation data over geopolitical noise. Vinod Nair, Head of Research at Geojit Investments Limited, noted that slowing growth and easing inflation in the US, EU, and China are bolstering expectations for accommodative monetary policy. “Sustained earnings outperformance in Q1FY27 is likely to reinforce confidence in the FY27 corporate earnings outlook, which could help catalyse a recovery in FII inflows,” Nair said.
From a technical standpoint, the immediate path for the benchmarks remains defined by key support and resistance zones. Ajit Mishra, SVP of Research at Religare Broking, highlighted that the Nifty 50 has support at 23,800–24,000 and faces immediate resistance between 24,400 and 24,600. Bank Nifty is also showing relative strength, with Mishra noting that a sustained move above 58,800 could trigger a rally towards 60,000. For the Sensex, Ponmudi R, CEO of Enrich Money, identified 77,800–78,000 as the immediate resistance ceiling, with 77,000 acting as a crucial psychological support level.
Despite the cautiously positive technical setup, strategists are warning against complacency. Mishra advised investors to focus on companies with strong earnings visibility and healthy balance sheets, while strictly managing risk. “Investors should maintain disciplined position sizing, avoid excessive leverage, and adhere to prudent risk management practices, given the potential for sharp market swings around earnings announcements and geopolitical developments,” he said.
