Indian Equities Under Pressure Amid Geopolitical Tensions and Earnings Season

Indian equities are expected to remain under pressure due to ongoing geopolitical tensions in West Asia. The US-backed temporary ceasefire proposal has been rejected by Iran, heightening the risk of prolonged disruptions through the Strait of Hormuz and the Red Sea. This has pushed Brent crude oil prices above $100 per barrel, raising concerns over inflation, energy supplies, and India's external balances.

The rupee continues to weaken, trading around Rs 96.6 per US dollar, while Foreign Institutional Investor (FII) selling remains sustained. However, the ongoing Q1FY27 earnings season is expected to drive stock- and sector-specific action, limiting broader downside. Key earnings this week include BEL, Coal India, Hindustan Unilever, Larsen & Toubro, Adani Ports, Mahindra & Mahindra, Maruti Suzuki, Coforge, Bajaj Finance, Colgate, Sun Pharma, and Glenmark Pharmaceuticals.

Globally, investors will closely monitor the US Federal Reserve's policy decision, where interest rates are expected to remain unchanged. The Bank of Japan's policy meeting, US Q2 GDP, Core PCE inflation, Non-farm Payrolls, China's PMI data, Eurozone GDP and inflation, and India's Infrastructure Output will also provide further direction on global growth and interest-rate expectations.

The ECB kept its key policy rates unchanged at 2.25%, retaining a data-dependent approach while cautioning that elevated energy prices and geopolitical tensions have increased uncertainty around the inflation outlook. ECB President Christine Lagarde reiterated that future policy decisions will remain meeting-by-meeting and driven by incoming economic data.