Dalal Street Pauses Near Record Highs

Indian equity benchmarks hovered close to record highs during the last fortnight. If the momentum from the previous month had persisted, fresh peaks seemed within reach but Dalal Street lost some steam. After a brief uptrend at the start of the period, indices moved in a narrow band with a mild downward bias, reflecting a mix of domestic stability and intermittent global risk-off sentiment. The BSE Sensex and Nifty 50 ended lower by 1.18 per cent and 1.17 per cent, respectively.[EasyDNNnews:PaidContentStart]

Broader markets showed a mixed performance, lacking strong direction. The BSE Mid-Cap Index managed a modest 0.37 per cent gain, while the BSE Small-Cap Index slipped 0.87 per cent, indicating selective investor participation. Among the sectoral indices, the Oil & Gas index emerged as the top performer. Global crude prices rebounded after weeks of weakness, supported by U.S. sanctions on Russian oil and optimism over an end to the U.S. government shutdown, though oversupply concerns capped the upside.

Indian markets stayed within touching distance of record highs but lacked the conviction to break through. While oil & gas and metal stocks powered ahead, weakness in IT and cautious global cues kept sentiment in check.

Strong Q2FY26 earnings from oil and gas companies further lifted sentiment. ONGC reported higher crude output and stronger operating margins, while GAIL witnessed margin recovery in its gas marketing and petrochemical segments. In contrast, the Information Technology index came under pressure, tracking the decline in global tech stocks. Weak earnings guidance and layoffs by major U.S. technology firms raised doubts about the sustainability of the AI-driven rally. Growing fears of an AI valuation bubble prompted profit booking in expensive tech counters.

Domestic IT stocks, which had rallied in tandem with their global peers, faced valuation concerns and cautious commentary on client spending in BFSI and discretionary verticals. While the secondary market witnessed subdued sentiment, the primary market remained buoyant, with prominent names such as Lenskart Solutions and Groww gearing up for their listings. Despite strong brand recognition and robust subscription, Lenskart’s listing fell short of expectations, disappointing investors who had bet on its growth story in India’s expanding eyewear market.

Volatility edged higher, with the Nifty VIX rising about 9-10 per cent, hinting at short-term fluctuations ahead. Apart from a standout session when FIIs invested over ₹10,000 crore in domestic equities, foreign investors largely remained net sellers. In contrast, DIIs infused more than ₹35,000 crore, providing steady support to the market. With renewed optimism surrounding a potential India-U.S. trade deal and Q2 earnings recovery, investors are eyeing a possible rebound that could once again push markets toward record highs. Stay tuned for further updates!

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