Nifty gains 1.65% for week as IT, monsoon cap rise

Weekly close: benchmarks end higher, but Friday dents mood

Indian equities closed the week in the green, supported by gains in financials, realty and capital goods, alongside foreign inflows and softer crude prices. But a sharp sell-off in information technology stocks on Friday, along with a weakening monsoon outlook, capped the upside. The BSE Sensex rose 1.69% for the week and the NSE Nifty gained 1.65%. Even so, both benchmarks slipped nearly 1% on Friday after a four-session rally. By the end of the week, the Sensex settled at 76,802.88 and the Nifty closed at 24,013.10.

Friday action: five-session winning streak ends

On Friday, the key equity benchmarks posted major losses, snapping their five-session winning streak. Heavy selling in index-heavyweight IT stocks drove the decline, and profit-booking added to the pressure after recent gains. The Nifty 50 index fell 154.90 points, or 0.64%, to 24,013.10 and ended below the 24,050 mark. Sector performance was mixed, with IT, oil and gas, and realty shares declining, while pharma, media and metal shares advanced. Despite the weak finish, strength in domestic-facing sectors through the week helped markets close in positive territory.

Trigger for IT sell-off: Accenture trims FY26 outlook

Sentiment in technology counters weakened after IT major Accenture trimmed its FY26 revenue growth forecast and flagged potential revenue risks linked to West Asia-related challenges. Accenture now expects FY26 revenue growth of 3% to 4% in local currency, compared with its earlier forecast of 3% to 5%. Excluding the impact of its US federal business, it expects growth of 4% to 5%, down from 4% to 6% earlier. Following the update, the Nifty IT index fell 3.65% to 27,426.85. The index also declined 4.80% over two consecutive trading sessions, underscoring how quickly risk appetite cooled for IT after the earlier run-up.

Weekly momentum: strong run before the pullback

The sell-off on Friday came after a strong stretch for benchmarks. Over the past five trading sessions, the Sensex jumped 4.85% and the Nifty climbed 4.35%. The market had earlier opened flat on one session as lower crude prices offset weakness in IT shares amid US Federal Reserve interest rate remarks. During that same spell, the Nifty 50 was up 0.11% and the Sensex increased 0.12% in early trade, reflecting a cautious but positive tone before the week’s later volatility.

Fed and global rates: higher-for-longer keeps investors cautious

Investors remained watchful of the US Federal Reserve’s policy stance. Persistent inflation concerns and expectations that interest rates could stay higher for longer were cited as factors weighing on risk sentiment. Against this backdrop, market participants indicated they would track three near-term drivers for cues: monsoon developments, FII activity, and inflation trends. The combination of rate uncertainty abroad and weather-linked inflation risk at home kept positioning selective, especially into Friday’s close.

Monsoon slowdown: deficit widens, Centre steps up monitoring

Beyond global cues, the monsoon outlook became a key domestic risk monitor. India’s southwest monsoon stalled after reaching Kerala, leaving the country with a rainfall deficit of 35% as of 16 June. The shortfall was most severe in central India at 63%, and 43% in eastern and northeastern regions. The monsoon had also not reached Mumbai, more than a week after its normal arrival date. The India Meteorological Department (IMD) expects the current slowdown to persist for another five to six days due to unfavourable weather conditions.

The delay has coincided with concerns over a developing El Nino, which typically weakens monsoon rains. In response, the Centre placed 150 to 200 districts under close monitoring, asked states to prepare crop contingency plans, and warned that a weak monsoon could raise food inflation and pressure agricultural output. Officials also said seed, fertiliser and reservoir stocks remain adequate for now.

How the monsoon narrative hit markets earlier in the week

Weather concerns were already affecting risk appetite earlier, with one session marked by heavy selling as investors reacted to a weaker-than-normal monsoon forecast and uncertainty around the US-Iran conflict. During that sell-off, the Sensex tumbled more than 1,000 points and the Nifty slipped below the 23,600 mark. Market sentiment weakened after the IMD projected monsoon rainfall at 90% of the Long Period Average (LPA), adding to worries around agricultural output and food prices. Even in that risk-off session, the Nifty IT index was the only major sector to buck the trend, rising 0.60% amid continued buying in technology shares.

Snapback sessions: IT strength also supported rebounds

The week also included sharp reversals driven by IT-led buying. On Tuesday, the Sensex jumped 382.50 points, or 0.52%, to 74,649.84, while the Nifty rose 100.95 points, or 0.43%, to 23,483.55. The BSE IT Index surged 4.40% to 30,106.93, while the BSE FMCG index gained 0.72% to 18,024.61.

Market voices highlighted a shift in investor focus after earnings season. One market participant, Nair, said attention had moved to macro factors including monsoon progress, inflation trends, RBI policy and liquidity. Separately, Hariprasad K, a SEBI-registered Research Analyst and Founder of Livelong Wealth, said investors were rewarding sectors linked to global growth themes such as AI and technology, while remaining cautious on areas exposed to domestic demand pressures, commodity inflation and geopolitical risks.

Key numbers at a glance

Market impact: rotation, risk controls, and what investors are tracking

The week’s price action showed a split between domestic-facing sectors and global cyclicals. Financials, realty and capital goods helped keep the broader market positive on a weekly basis, supported by foreign inflows and softer crude prices. But Friday’s IT sell-off demonstrated how quickly global growth signals can affect Indian index performance when heavyweight sectors turn.

At the same time, the monsoon slowdown became a live variable for inflation expectations. With the Centre warning that a weak monsoon could raise food inflation and pressure agricultural output, investors had an additional macro risk to balance against foreign flows and crude prices. The immediate market response was not uniform across sectors, but the combination of IT volatility and monsoon headlines contributed to a more cautious finish to the week.

Why it matters: global guidance meets domestic inflation risk

Two developments intersected in a way markets could not ignore. First, Accenture’s lower FY26 growth guidance and mention of West Asia-linked risks fed into concerns about demand and visibility for IT services. Second, the monsoon deficit and delayed progress raised the possibility of food inflation pressure, a key input into domestic rates and consumption.

With investors also watching the Fed’s inflation-linked stance, the near-term direction for equities is being framed around measurable signals rather than broad risk-on sentiment. In this setup, market participants said they will closely monitor monsoon developments, FII activity and inflation trends for cues.

Conclusion

Indian equities ended the week higher, with the Sensex up 1.69% and the Nifty up 1.65%, even after Friday’s IT-led sell-off pulled both indices down nearly 1% on the day. The next set of cues highlighted by market participants remains unchanged: monsoon progress, foreign investor activity and inflation trends, with global rate signals continuing to influence risk appetite.