Dalal Street closed the week on a high, with the benchmark Sensex and Nifty climbing more than 1% on Friday. Analysts expect a host of domestic and global cues to steer market sentiment this week.
For the week, the Sensex rose over 582 points, or 0.75%, while the Nifty 50 gained more than 127 points to settle at 24,334.
Friday's rally was led by Tech Mahindra, Kotak Mahindra Bank, TCS, Reliance Industries, ICICI Bank, Hindustan Unilever, Mahindra & Mahindra, Axis Bank, Bajaj Finance, HDFC Bank, and Infosys, with these stocks advancing 1-4%. In contrast, Sun Pharma, Trent, Bharti Airtel, and UltraTech Cement slipped around 1% each.
Here are six key factors likely to steer the stock market this week:
The June-quarter earnings season will gather pace in the coming week, with 256 companies set to announce their Q1 results. Key companies on the earnings calendar include Paytm, Bajaj Auto, TVS Motor, Adani Power, BPCL, Eternal, IndusInd Bank, HPCL, UltraTech Cement, Infosys and Bank of Baroda.
According to Vinod Nair, Head of Research at Geojit Investments, market sentiment remains supported by encouraging Q1FY27 business updates and rising optimism over a healthy earnings season.
The conflict between Iran and the US continues to escalate after a brief period of calm earlier this month. Fighting intensified on Friday, with the US striking bridges and an airport in Iran, while Tehran targeted a power and desalination plant in Kuwait.
Iran also said it launched fresh strikes on US facilities across the Middle East, including its first direct attack in Syria, following a sixth consecutive night of US strikes on Iranian military sites.
Crude prices have surged amid the escalating Middle East conflict. Brent crude futures climbed around 5% to $88.10 a barrel, while US West Texas Intermediate (WTI) futures rose over 4% to $82.49, with both benchmarks hitting their highest levels since mid-June.
For the week, Brent and WTI gained about 16%, marking Brent's third straight weekly advance and WTI's second.
The rally comes after the collapse of the US-Iran truce disrupted oil flows through the Strait of Hormuz, a key route that previously handled around 20% of global oil supplies. Iran has also reportedly urged the Houthis to block the Red Sea shipping route if the US targets its power infrastructure.
Global tech stocks remained under pressure, with the US market witnessing a sharp selloff on Friday. Chipmakers led the decline, dragging the Philadelphia SE Semiconductor Index more than 20% below its June record high, pushing it into bear market territory.
The S&P 500 and Nasdaq fell more than 1% each on Friday, while the Dow Jones Industrial Average slipped nearly 0.8%. For the week, the S&P 500 lost 1.55%, the Nasdaq declined 2.9%, and the Dow fell 0.93%.
Elsewhere, South Korea's Kospi remained in a bear market despite being up nearly 62% for the year. Japan's Nikkei entered correction territory on Friday, while Europe's tech sector was among the week's worst performers after posting its biggest quarterly rally since 2001 in June.
Despite the global weakness in technology stocks, the Indian market has remained relatively resiliensot, with several analysts pointing to India's so-called "anti-AI advantage" as a key supporting factor.
Also read: Wall Street's chip index enters bear market! Is the AI bubble finally going bust?
The Indian rupee posted its sharpest weekly decline since May, weighed down by elevated crude oil prices and strong importer demand for the US dollar. The currency settled at 96.28 against the greenback, down about 1% for the week.
"The broader bias for the rupee remains weak as elevated crude oil prices and cautious foreign fund flows continue to weigh on sentiment. Market participants will closely monitor global developments, crude oil movements, and FII activity for the next directional move. Technically, the rupee is expected to trade in the 96.00-96.55 range, with the overall trend favouring further weakness," said Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities.
After strong inflows earlier this month, foreign institutional investors (FIIs) largely turned net sellers last week. FIIs pulled out Rs 8,743.35 crore from Indian equities, while domestic institutional investors (DIIs) remained net buyers, investing Rs 8,790.75 crore, according to Vinit Bolinjkar, Head of Research at Ventura.
What lies ahead?
Indian equities weathered a volatile week to end with gains, as investors increasingly shifted towards large-cap stocks, said Geojit’s Nair.
"Despite concerns over escalating tensions in West Asia, which pushed crude oil prices above $85 a barrel and pressured the rupee, market sentiment remained supported by encouraging Q1 FY27 business updates and growing confidence in a healthy earnings season," he said.
Nair noted a clear rotation towards largecaps, driven by rich valuations in the broader market and the relatively attractive valuations and stronger earnings visibility of bluechip companies.
“On the sectoral front, IT stocks led gains following constructive management commentary and positive earnings expectations, while consumer durables benefited from optimism around stronger domestic demand in the second half of FY27. In contrast, realty and metal stocks remained under pressure,” according to Nair.
Looking ahead, Nair said investors will closely track Japan's inflation data for interest rate cues and India's PMI readings for fresh signals on economic activity and business confidence. He added that corrections in select Asian markets amid concerns over stretched AI-driven valuations could enhance India's appeal among emerging markets, supported by its strong macro fundamentals and resilient domestic demand.
Rupak De, Senior Technical Analyst at LKP Securities, stated that the overall trend remains positive, as the Nifty continues to trade above its key moving averages, while the RSI has entered a bullish crossover, indicating strengthening momentum.
"In the near term, the index is likely to remain firm, with the potential to move towards 24,800. On the downside, immediate support is placed at 24,200. A decisive break below this level could trigger a phase of consolidation," he added.
Also read: NIfty IT logs best weekly gains since Oct 2025
