The Indian equity benchmarks saw a 1% increase over the week, marked by volatile trading sessions with a cautiously optimistic tone amidst mixed global cues and escalating geopolitical tensions. Towards the end of the week, risk appetite waned ahead of the Union Budget 2026-27, as Foreign Institutional Investor (FII) outflows and rupee depreciation led to losses in the final trading session. Nifty rose by 1.09% during the week but declined by 0.39% on the last trading day to 25,320, while Sensex closed down by 296 points or 0.36% at 81,537, having gained 0.90% over the week.
Sectoral indices displayed mixed performance, with diversified consumer services and hardware tech stocks witnessing the poorest performance, dropping by 2.5% to 3.7%. Conversely, FMCG, media, and software stocks experienced declines of over 1%. Metal stocks and oil and gas emerged as the top gainers for the week, each rising by over 2%. However, the Nifty metal index plunged by over 5% on the final trading day. Profit booking intensified in the IT sector due to a stronger dollar, global liquidity concerns, and caution surrounding the incoming Fed Chair, analysts noted.
While broader indices showed stronger gains, with the Nifty Midcap100 climbing by 2.25% and the Nifty Smallcap100 by 3.2%, the market opened the week with subdued sentiment due to tariff-related worries and mixed corporate earnings. Mid-week, market sentiment improved following a positive economic survey that reinforced expectations of robust growth in FY27 and a favorable inflation outlook. Analysts cautioned that markets remain watchful of potential inflation impacts on financial conditions, especially for emerging markets.
Looking ahead, market movements are anticipated to be event-driven, with the Union Budget serving as a key domestic trigger. Cyclic sectors may exhibit relative resilience if backed by policy measures, while IT and export-oriented stocks are likely to remain sensitive to global macroeconomic cues, analysts suggested.
