WEEKLY MARKET RESEARCH REPORT 12-16 Jan | Scrolls

by Karnivesh | January 2026

WEEKLY MARKET RESEARCH REPORT 12-16 Jan 2026 (1).pdf

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The Indian equity market entered the week of January 12–16, 2026, at a moment of quiet tension, caught between earnings reality and global uncertainty. What unfolded was not a dramatic rally or a sharp sell-off, but something more important: confirmation that the market had found its footing. Despite persistent foreign investor selling and unsettling global headlines around potential US tariff escalations, headline indices remained virtually flat, with the Nifty and Sensex holding firmly above critical support levels. This calm performance was deceptive on the surface, because underneath it reflected a market transitioning from correction to consolidation, where expectations were being reset and capital flows were quietly reshaping leadership.

Earnings season provided the week’s emotional pulse. Large IT companies delivered a reality check rather than a shock. TCS reported a sharp year-on-year profit decline, but investors looked past headline numbers and focused on stable margins, resilient BFSI demand, and accelerating AI revenues. Infosys emerged as the psychological turning point of the week, not because profits surged, but because management upgraded full-year guidance. That signal reassured markets that current pressures—from labor costs to global demand uncertainty were temporary rather than structural, and that a recovery path into FY27 remained intact. In banking, divergence was evident but constructive. HDFC Bank delivered strong double-digit profit growth and stable asset quality, reinforcing confidence in the sector’s core earnings engine, while ICICI Bank’s profit decline was offset by healthy net interest income growth, reminding investors that underlying fundamentals remained solid.

The real story, however, lay in capital flows. Foreign portfolio investors continued to sell aggressively, driven by fears of tariff escalation, currency risk, and global risk-off sentiment. Yet, for the second consecutive week, domestic institutional investors absorbed nearly all of this selling. This quiet standoff marked a structural shift in the Indian market. Prices no longer moved at the mercy of foreign flows alone; domestic capital—powered by SIPs, insurance inflows, and long-term pension money—acted as a stabilizing force. The result was a market that refused to break down, even under sustained external pressure.

Sectoral performance revealed how investors were positioning for uncertainty. Capital rotated decisively toward domestically anchored and policy-supported sectors. PSU banks and metals outperformed sharply, benefiting from earnings visibility, infrastructure demand, and lower exposure to global trade risks. IT stocks recovered modestly following guidance clarity, while pharma, auto, and consumer discretionary lagged due to their sensitivity to export tariffs and global demand. This selective rotation signaled discipline rather than fear, as investors chose safety and earnings visibility over broad-based risk-taking.

By the end of the week, it became clear that the market had entered a phase of equilibration. Volatility remained elevated but controlled, support levels around 25,500–25,700 proved resilient, and investor behavior shifted from panic or euphoria to patience and selectivity. The Indian market was no longer asking whether it would fall further, but what catalyst would be required to break out of its consolidation range. With earnings clarity improving, domestic liquidity standing firm, and structural growth intact, the week marked not an end, but a pause a moment where the market caught its breath before choosing its next direction.