Dalal Street wrapped up Thursday on a note of indecision. The BSE Sensex closed 1.44 points higher at 77,186.87, barely moving the needle. The Nifty 50, however, gave up 5.75 points to end at 24,072.75.
It was a session of false starts. Both indices opened with gains, hit intraday highs — Sensex at 77,579.69 and Nifty at 24,186.50 — then slid as selling emerged in heavyweights. By the closing bell at 3:30 PM IST, the market had essentially gone sideways, reflecting a classic “wait and watch” mood.
Inside the Trade: IT Saves the Day, Banks Pull the Plug
Breadth was mixed, but sector moves were sharp.
What worked:
IT came back to life after a 2-day slide. The Nifty IT index rose 0.7%. Wipro jumped 1.8% and Tech Mahindra added 0.8% ahead of their quarterly numbers. Pharma, Metals and select healthcare names also saw defensive buying.
What didn’t:
Financials were the anchor. The sector fell 0.5%. ICICI Lombard crashed 10.5% to a 2-year low post weak earnings commentary. ICICI Prudential Life dropped 3.1%. Broader market too felt the chill — smallcaps slipped 0.1% and midcaps 0.4%.
9 out of 16 NSE sector indices finished in the green, but the gains were too thin to push the headline indices meaningfully.
The Big Business Story: FIIs Are Back, But Don’t Pop the Champagne Yet
There was one piece of good news for bulls — foreign money is returning.
HSBC upgraded India to ‘Neutral’ from ‘Underweight’ this morning. The rationale: crude has cooled and the rupee has stabilized, easing earnings risk for Indian companies. HSBC also hiked its year-end Sensex target to 84,000 from 80,500, seeing 8.6% upside from here.
The data backs it. FPIs have pumped in $1.6 billion into Indian equities in July so far, turning net buyers after 4 months of outflows. Goldman Sachs made a similar upgrade earlier this month.
But the relief rally has limits. Oil remains India’s biggest macro risk. Brent is down 33% from April’s $126 peak, but it’s still hovering near $85 after fresh US-Iran tensions. For a country that imports over 80% of its crude, any spike feeds directly into inflation and the current account.
On the trade front, there was a positive signal. The India-UK FTA is showing early traction. Exporters report rising enquiries from UK buyers and the first post-deal jewellery shipment has left Indian shores.
Earnings season is also in play. TCS and HCLTech beat revenue estimates, but the Street is worried about weak client demand in IT. With no signs of a demand revival, growth visibility remains hazy.
Geopolitics Takes Center Stage: Hormuz Headlines Rattle Nerves
If you’re wondering why markets couldn’t hold gains, look West.
The past week has been all about the Strait of Hormuz. Last Tuesday, news that the US would reinstate a blockade on Iranian shipping sent Brent above $87 and triggered selling in Realty, Auto and Financials. The Sensex lost 561 points that day.
Things calmed mid-week when President Trump withdrew a proposed 20% transit fee. Crude eased to $85 and Indian markets bounced, with Sensex adding 130 points on Wednesday.
But calm didn’t last. Reports of US strikes and a fresh naval blockade pushed Brent back toward $86 on Monday. Analysts at Axis Direct flagged that “developments around crude and Hormuz will remain key drivers”.
The fallout: volatility. The rupee weakened to 96.17/USD earlier this week before RBI measures helped stabilize it. For India, any disruption to oil tanker movement is a direct hit to sentiment.
Technical View: Stuck in a Box
Chartists aren’t excited yet.
Nifty is caught between 24,000 support — the 20-day moving average — and 24,200 resistance. A close above 24,200 could open the door to 24,350-24,500. A fall below 24,000, however, risks a slide to 23,900-23,800.
Sensex is mirroring Nifty, consolidating just above its previous close of 77,185.43. Until we get a decisive breakout, expect choppy, range-bound moves.
Street Talk: What Comes Next?
Market experts are unanimous on one thing — we need a trigger.
“Indian markets reflect confidence in macro fundamentals, but elevated crude and geopolitical risks are key monitorables,” said Vikram Kasat, Head Advisory at PL Capital.
The watchlist is clear:
1. Crude & Hormuz: Any escalation could derail the FII comeback story.
2. Earnings: IT and Bank results will decide sector leadership for Q1FY27.
3. Global cues: Softer US CPI data has raised hopes of a Fed rate cut. That helped Wall Street overnight and could support EMs like India.
Despite near-term caution, the long-term view hasn’t changed. Morgan Stanley still projects Sensex at 107,000 by Dec 2026, betting on domestic demand and policy continuity.
Bottom Line
Thursday was a day of consolidation, not conviction. Sensex managed a flat-to-positive close, Nifty didn’t. Foreign flows are improving and oil has cooled from peaks, but geopolitics is keeping traders defensive.
Until the Hormuz situation resolves and earnings provide direction, expect the market to trade in a tight band. Stock picking, not index chasing, is likely to be the game for now.
