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Below the Quote on Daily Market Commentary for July 6th 2026 by Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd

Indian equity markets are likely to gradually move higher, supported by stable crude oil prices, a steady rupee, and strong pre-quarterly business updates, particularly from index heavyweight banks and financials. Brent crude is trading around USD 72/bbl, close to pre-conflict levels, while the rupee has stabilized around Rs 95.4/USD, improving the overall macro backdrop. Indian equity markets ended higher on Monday, with the Nifty 50 gaining 0.7%, while the Midcap100 and Smallcap100 indices advanced 0.5% and 0.8%, respectively. Market focus is now shifting to the Q1FY27 earnings season, which is expected to be the key near-term catalyst. We expect Nifty earnings to grow around 10% YoY in Q1FY27—the strongest quarterly growth in the past four quarters. Earnings growth is expected to be led by Financials, driven by NBFCs (+27% YoY), private banks (+10%) and PSU banks (+9%), along with Metals (+31%), Telecom (3.3x YoY), Capital Goods (+10%), Retail (+27%), Consumer Durables (+27%). While elevated commodity costs and a high base may weigh on margins in select sectors, earnings growth is expected to remain resilient. Defence stocks are expected to remain in focus, supported by recent defence collaboration with Japan and PM Modi's upcoming three-nation tour (Indonesia, Australia, New Zealand) emphasizing defence cooperation. Additionally, the Defence Acquisition Council's July 3 approval of Rs 52,000 crore in Acceptance of Necessity proposals across Army, Navy and Air Force will accelerate contracts in drones, electronic warfare, AI-enabled systems and precision strike platforms, improving order visibility for domestic defence companies. With attractive valuations and resilient domestic macro indicators supporting the market, stock- and sector-specific action is likely to increase as the earnings season unfolds

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