Indian equities are expected to open on a positive note, supported by a global market rally and softer crude oil prices following a temporary pause in US-Iran hostilities.
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Indian equities are poised for a positive start to the week as a global market rally and softer crude oil prices, triggered by another Iran-US truce, lift investor sentiment. Gift Nifty at 23,950, a marginal gain for Nifty at open. Asians stocks that gained in the early, however, turned weak now (730 am IST).Ponmudi R, CEO of Enrich Money, said Indian equities are likely to begin the week on a positive note as investors take comfort from a temporary easing in geopolitical tensions, lifting risk sentiment across global markets. Market sentiment strengthened after the Trump administration signalled a pause in further military strikes on Iran to allow diplomatic efforts to continue, easing immediate concerns over a broader regional conflict, he said.However, analysts said the market will remain cautious and volatile due to uncertainty and the expiry of monthly F&O contracts on the NSE on Tuesday.Derivatives positioning points to continued volatilityKruti Shah, a quant analyst at Equirus Securities, said derivatives positioning continues to weaken as FIIs remain sitting on higher index shorts. Overall, leverage has not yet fully reset, and short covering is not in sight so far.“PCR is turning oversold as writers turned aggressive but high volatility & monthly expiry scheduled on Tuesday makes them fragile and might trigger a move opposite to expectation. With the Q1FY27 earnings season gathering pace, management commentary and earnings revisions are expected to become the primary drivers of stock-specific performance, leading to greater dispersion across sectors,” she said.According to Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities, India VIX advanced to 14.03, indicating elevated risk perception and expectations of higher near-term volatility. Option positioning also reflects a cautious undertone, with maximum Put Open Interest concentrated at the 23,700 strike, indicating immediate support, while maximum.“Overall, the Technical and Derivatives landscape continues to favour a sell-on-rise strategy. A sustained move below 23,650 could accelerate the corrective phase towards 23,515-23,325, while only a decisive close above 24,000-24,130 would improve the near-term outlook and signal a meaningful recovery,” he added.FPI flows, crude prices and earnings remain key market triggersThe focus will also be on foreign portfolio investors, who turned sellers this month, especially during the last few days.Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking, said foreign Institutional flows are likely to remain volatile until there is greater clarity on the geopolitical situation and sustained stability in crude oil prices, which will be key to restoring investor confidence and improving the outlook for equity markets. In the coming week, investors will closely track crude oil price movements and developments in the ongoing US-Iran geopolitical tensions. Additionally, the Q1FY27 earnings season will remain in focus.V K Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, said that so far this month, FPIs have continued to be big sellers in markets like South Korea and Taiwan.“This weakening of the chip trade is positive for India. However, the spike in Brent crude following the escalation of the conflict in West Asia is becoming a concern since it will again impact India’s macros if the price spike lasts longer. If crude price declines and stabilises FPIs are likely to turn consistent buyers in India. Therefore, crude price is the data to watch,” he added. The rise in the US 10-year bond yield to 4.7% is largely negative for equities. This might slightly affect FPI flows to emerging markets, he added.Defensive sectors attract buying as broader market stays weakSectoral, mid-cap IT made a good comeback, both on the back of short covering and cash-led buying, according to Shah. “Defensive pockets such as FMCG and Low Volatility strategies continue to attract institutional flows,” she said, adding that weakness persists in the broader mid-cap universe and still warrants caution.Published on July 27, 2026
