Will Nifty, Sensex extend gains on Monday? Q1, oil among 5 major factors investors must track

Benchmark indices Sensex and Nifty are headed into a crucial week as investors brace for a heavy earnings calendar, monitor escalating tensions in the Middle East after the United States and Iran resumed attacks on each other, and track the trajectory of crude oil prices.

Despite the uncertainty, Indian equities ended the week on a strong note. The Sensex and Nifty gained more than 1% each on Friday, extending their rally for a second straight session. Meanwhile, India VIX, the market's fear gauge, declined another 8% to 12.33, signalling easing volatility expectations.

Here are five key factors likely to shape market sentiment this week.


1. Major Q1 earnings this week

The June quarter earnings season gathers pace this week, with 143 companies scheduled to announce their results between Monday and Saturday. Heavyweights including Reliance Industries, HDFC Bank, ICICI Bank, Axis Bank, Wipro and HCL Technologies will be in focus, with investors closely tracking management commentary and brokerage reactions for cues on the road ahead.

2. Oil prices

Crude oil prices will remain a key monitorable after geopolitical tensions intensified in West Asia. During the week gone by, Brent crude gained more than 5%, while West Texas Intermediate (WTI) rose over 4% after the United States launched fresh strikes on Iran, which vowed a decisive response. Higher crude prices remain a key concern for Indian companies.

Iranian Foreign Minister Abbas Araqchi accused the United States of violating the ceasefire agreement after Washington revoked the licence permitting the sale of Iranian crude on Tuesday, following the attacks on the vessels. "There can only be mutual compliance," Araqchi wrote on X.

Earlier this week, three commercial tankers from Qatar and Saudi Arabia came under fire, triggering U.S. strikes on Iranian sites. Iran responded by targeting U.S. military installations in Gulf states.

3. FII, DII activity

Foreign Institutional Investors (FIIs) turned net buyers last week, purchasing equities worth Rs 4,670 crore, according to provisional exchange data. Domestic Institutional Investors (DIIs) also remained net buyers, with purchases worth Rs 8,280 crore.

Meanwhile, mutual fund Systematic Investment Plan (SIP) contributions rose to a three-month high of Rs 31,780 crore in June 2026, according to data released by the Association of Mutual Funds in India (AMFI). This marked a 2.7% month-on-month increase from Rs 30,950 crore in May 2026 and a 16.5% rise from Rs 27,270 crore recorded in June 2025.

"Looking ahead, institutional flows are likely to remain sensitive to a range of global and domestic developments. On the global front, investors will closely monitor movements in crude oil prices and any progress in the ongoing US-Iran peace talks, as these could influence inflation expectations, energy costs, and overall market sentiment," said Pabitro Mukherjee, Deputy Vice President at Bajaj Broking.

4. Global cues

Global markets will also be closely watched after technology and AI-focused stocks came under pressure following a prolonged rally that pushed companies such as Nvidia, Samsung and SK Hynix to record highs, as investors reassessed the sustainability of heavy AI spending.

Any sharp correction in Asian or U.S. equities amid geopolitical uncertainty or continued unwinding in technology stocks could spill over into Indian markets. Asian markets ended Friday on a firm footing, with South Korea's Kospi surging more than 2%, Japan's Nikkei rising over 1.4%, and Hong Kong's Hang Seng gaining 0.5%.

On Wall Street, the S&P 500 rose 0.42% to 7,575.39, extending weekly gains. The Nasdaq Composite added 0.29% to close at 26,281.61, while the Dow Jones Industrial Average advanced 149.60 points, or 0.29%, to settle at 52,637.01.

5. Monsoon progress

The progress and distribution of the southwest monsoon will remain on investors' radar because of its implications for rural demand, inflation and agricultural output. A healthy monsoon is expected to support farm incomes and consumption, benefiting sectors such as FMCG, automobiles and other rural-focused businesses.

Technical set up

Benchmark Nifty continues to oscillate around its key moving averages, which have flattened following the prolonged sideways trend. Momentum indicators and oscillators are also signalling a similar picture. Both the daily and weekly RSI remain range-bound, while the daily ADX has slipped to 12.05 and continues to trend lower, indicating the absence of meaningful strength in either direction.

Going ahead, the 24,500-24,550 zone is likely to act as a key hurdle for the index, while the 23,950-23,900 zone remains a crucial support area. A decisive breakout or breakdown beyond these levels could mark the beginning of the next directional move, said Sudeep Shah of SBI Securities.

"In sharp contrast to the benchmark index, the broader market continues to display remarkable resilience. Both the Nifty Midcap 100 and Nifty Smallcap 100 are significantly outperforming the frontline indices. The Nifty Midcap 100 scaled a fresh all-time high during the week, while the Nifty is still nearly 8% below its lifetime peak. Meanwhile, the Nifty Smallcap 100 is just a stone's throw away from registering a new all-time high. We continue to believe that the broader market is well positioned to sustain its relative outperformance in the near term," he added.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)