Pulse of the Street: Dalal Street’s winning streak faces an inflation test

Résumé détaillé

Stronger earnings and foreign buying extended the market’s rally, but rising inflation and continued domestic institutional selling could limit further gains.

MUMBAI: Indian equities extended their winning streak to a third consecutive week, supported by stronger corporate earnings and sustained foreign buying. But the rally lost momentum, with rising inflation and continued domestic institutional selling raising questions about its durability.

The Nifty fell 0.6% on Friday to close at 25,144.30, while the Sensex declined 0.4% to 81,592.44. For the week, however, the indices gained 0.45% and 0.69%, respectively, following a nearly 9% surge in the previous week.

Improving earnings offered support, with capital goods, financial services and realty stocks leading sectoral gains. But persistent domestic institutional selling and uncertainty over interest rates suggest the market faces a tougher test after its sharp rebound.

A Mint analysis of standalone results for 2,892 BSE-listed companies, using ACE Equity data, showed revenue growth accelerating to 21.9% year-on-year in the September quarter of the fiscal year 2027 (Q2FY27), while profit rose 26.2%.

The performance marked a sharp improvement from Q1FY27, when revenue grew 18.6% and profit 9%. In Q2FY26, revenue and profit had increased 6.1% and 12.2%, respectively.

Nikunj Saraf, chief executive officer of Choice Wealth, said the durability of earnings growth mattered more than a single strong quarter. He favoured banking and financial services, automobiles, capital goods and industrials, citing domestic demand, credit growth and infrastructure spending.

“However, investors should remain selective, as earnings growth is not uniform across sectors,” he said.

Kranthi Bathini, director of research at WealthMills Securities, said companies had delivered encouraging results despite geopolitical uncertainty. Easing tensions could help them report better numbers in the coming quarters, he added.

Capital goods stocks led sectoral gains, rising 3.2% during the week. Financial services followed with a 2.7% gain, while realty and healthcare advanced 2.6% and 2.4%, respectively.

Début de l'article, extrait de Mint. Pour lire la suite, ouvrez l'article chez le média.