India stocks slip on Iran tension, brace for Q1 earnings
Indian benchmarks snapped a four-week rally on geopolitical turbulence, but strong institutional flows and the start of the earnings season are cushioning the market ahead of a critical week for US-Iran negotiations.
Indian equities posted marginal weekly losses, ending a four-week winning streak as escalating military strikes between the US and Iran triggered a mid-week sell-off before a late recovery. The Sensex fell 0.25% to 77,569.39 and the Nifty declined 0.26% to 24,206.90. However, broader markets outperformed, with midcap and smallcap indices gaining more than 1% each on sustained stock-specific buying.
The volatility was driven by a third round of US strikes aimed at curbing Iran's ability to target commercial shipping, following Tehran's closure of the Strait of Hormuz. Although President Donald Trump declared the ceasefire "OVER," diplomatic discussions are expected to continue, with Iran's foreign minister arriving in Oman for talks.
Oil prices retreated from their peaks, with WTI settling near $71 and Brent near $76, though WTI still logged a weekly gain of about 4%. The friction shifted the WTI prompt spread from contango into backwardation, a market structure that signals tighter near-term supply.
Foreign and domestic institutional investors provided a floor for the market. FIIs injected around ₹4,670 crore, while DIIs bought ₹8,275 crore, offsetting periodic profit-booking. The Indian rupee closed at 95.38 against the US dollar on Friday, finding support from softer crude and a weaker greenback despite earlier weekly pressure from safe-haven demand.
Attention is now turning to domestic fundamentals as the June-quarter earnings season accelerates. Nearly 100 companies report results for the quarter ended June 30, 2026. TCS opened the season with better-than-expected results, setting a positive tone for the technology sector ahead of HCL Technologies' report on Monday. Other major names reporting include Wipro, Groww, and Jio Financial Services.
“The Q1 FY27 earnings season will gather pace, with management commentary expected to play a pivotal role in shaping sectoral trends and earnings expectations,” said Ajit Mishra – SVP, Research, Religare Broking. Ponmudi R, CEO of Enrich Money, noted that “Foreign investors have gradually turned constructive amid improving global conditions, continued domestic institutional support remains a key pillar underpinning market stability and is likely to provide support to equities in the near term.”
