The Indian stock market is currently facing significant pressure, despite being in the midst of the Q1 FY26 earnings season. After a strong two-month rally fueled by expectations of robust quarterly results, recent earnings from key companies have failed to live up to market expectations, leading to a sharp correction in the broader indices.
Among the IT majors, the Q1 results have been mixed and underwhelming. HCLTech reported a decline in profit, while TCS posted a slight increase but still fell short of analysts’ expectations. Wipro, however, delivered a surprisingly good set of numbers, and Tech Mahindra posted an average performance. The overall sentiment in the IT sector remains cautious, given the tepid growth outlook and margin pressures.
Adding to the concerns, Axis Bank announced its Q1 results yesterday, showing a fall in net profit. More importantly, provisions surged significantly, indicating potential asset quality issues. Following the announcement, the stock plunged over 5% in today’s trade, further weighing down banking sector sentiment.
These developments come at a time when global uncertainty looms large, especially with the potential imposition of fresh tariffs by U.S. President Donald Trump. The market is anxious about the impact of these tariffs, which could dampen investor sentiment further, especially in emerging markets like India.
To make matters worse, global brokerage firm Citi recently downgraded Indian equities while upgrading South Korea and China. Citi cited valuation concerns and a relatively expensive Indian market compared to its Asian peers. This has raised questions over the sustainability of the rally seen in the last two months.
Nifty has now breached the important psychological support level of 25,000. The next key support lies around 24,500. If the index fails to hold above these levels, it could trigger further downside pressure in the coming sessions.
All eyes are now on Reliance Industries, which is set to report its Q1 FY26 results today. The stock has been a key driver of the market rally in the past quarter, surging nearly 20% from its April lows after posting strong Q4 numbers. Given its heavyweight status on the Nifty, Reliance’s results are expected to set the tone for the next market move.
In addition to Reliance, HDFC Bank and ICICI Bank will announce their Q1 results by Saturday. These banking giants are likely to play a decisive role in determining the direction of the market in the near term. Next week will be crucial for the Indian equity markets, as investors assess the cumulative impact of earnings, global cues, and potential policy actions.
With mixed earnings so far, valuation concerns, global tariff threats, and technical weakness in indices, market participants are bracing for a volatile period ahead.
Disclaimer:
This article is for informational purposes only and does not constitute financial advice or a recommendation to buy or sell any securities. Readers are advised to consult with a certified financial advisor before making any investment decisions. The views expressed are based on current market conditions and are subject to change without notice.
