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Stock Markets: Indian equity markets closed the week with modest gains of about one percent, navigating sharp intraday swings and uneven global signals. While investor sentiment remained cautious due to geopolitical uncertainties and foreign capital outflows, domestic factors helped benchmarks maintain a broadly positive direction for most of the week.

Weekly Performance of Key Indices

The Nifty 50 advanced 1.09 percent over the week, although it slipped 0.39 percent on the final trading day to settle at 25,320. The Sensex mirrored this pattern, declining 296 points, or 0.36 percent, in the last session to end at 81,537, while still registering a weekly gain of 0.90 percent. Market volatility picked up toward the close as participants trimmed positions ahead of major policy developments.

Budget Caution and Currency Pressure

Risk appetite weakened as the week progressed, largely due to rising caution before the Union Budget for 2026–27. Persistent foreign institutional investor selling, combined with a depreciating rupee, added pressure in the final session. These factors led to a defensive stance among traders, despite otherwise steady domestic fundamentals.

Sectoral Trends and Underperformers

Sectoral performance was mixed throughout the week. Consumer services and hardware technology stocks were among the weakest performers, declining between 2.5 percent and 3.7 percent. FMCG, media, and software stocks also ended lower, shedding more than one percent each. Analysts attributed part of the weakness to selective profit booking and concerns around margin pressures in competitive segments.

Metals and Energy Lead Weekly Gains

Metal, oil, and gas stocks emerged as the top weekly gainers, rising more than two percent. However, the gains were uneven, as the Nifty Metal index dropped sharply by over five percent in the final session, reflecting aggressive profit-taking. Energy stocks benefited from firm commodity trends, though late-session volatility capped overall advances.

IT and Auto Stocks Face Headwinds

Information technology stocks saw intensified selling as a firmer US dollar and global liquidity concerns weighed on sentiment. Uncertainty surrounding the incoming leadership at the US Federal Reserve added to the cautious outlook. Autos and beverage stocks also showed selective weakness, with competition and pricing pressures affecting investor confidence in certain companies.

Broader Market Outperformance

Broader market indices outperformed frontline benchmarks during the week. The Nifty Midcap 100 rose 2.25 percent, while the Nifty Smallcap 100 climbed 3.2 percent. Stronger participation in select mid- and small-cap stocks reflected improved risk tolerance earlier in the week, particularly among domestic investors.

Early Week Sentiment and Trade Developments

Markets began the week on a subdued note due to renewed tariff-related concerns and mixed corporate earnings announcements. However, optimism surrounding progress on an India–European Union trade agreement offered support, especially to sectors with higher export exposure and global linkages.

Economic Survey Boosts Mid-Week Confidence

Sentiment improved mid-week following the release of a favorable economic survey. The report reinforced expectations of solid growth in FY27 and highlighted a manageable inflation outlook. These signals helped stabilize markets temporarily, despite lingering global uncertainties.

Outlook Remains Event-Driven

Looking ahead, analysts expect markets to remain highly event-driven, with the Union Budget serving as the primary domestic catalyst. While cyclical sectors may continue to show resilience if supported by policy measures, IT and export-oriented stocks are likely to remain sensitive to global macroeconomic trends and monetary policy signals.