Market Talk by tradzo · 7 July 2026

The market has moved on from the war. The earnings haven't.

Nifty has recovered half its fall on hope — cheaper crude, a shaky truce, rate-cut bets. But the quarter now being reported is the one the war landed on, valuations are rich against soft cashflows, and the two risks that matter most are offshore, where India doesn't get a vote. So the question this week is simple: with the war out of the headlines, can earnings defend these prices without a fresh driver?

Harsh Patel · Founder & Research Analyst

Nifty 50 weekly chart (TradingView, NSE): a double top marked TOP 1 and TOP 2, price on the 50% retracement near 24,259 with 61.8% at 24,751 and 78.6% at 25,451 overhead, rising trend-line support, and a shaded green Opportunity Zone between roughly 14,739 and 19,180 below. — **Nifty 50 · Weekly · NSE** — the 50% / 61.8% / retracement band, rising trend-line support, and the **Double Top in creation.** (26373-21750). Chart Source: TradingView.

Support

24,25950%23,000swing low23750structure

Resistance

24,75161.8%25,000psych25,45178.6%

Analysis

As per the weekly chart analysis, Nifty has retraced 50% of the entire fall, from high of 26373 to low of 22182.55 during the West Asian war. Nifty is in the 61.8% – 50% retracement zone. A move to 24750 level is likely in the week ahead, which is the previous breakdown zone for the range near highs & coincidently the 61.8% retracement level.

The bounce may stretch a little further to 25,000 psychological level on hopes. But can it sustain above 25,000? Not without a real driver. Last quarter, decent results were sold. This quarter the numbers themselves look soft — but who can turn down the optimists?

On the downside, 23,750 is the correction zone; the swing low of 23,000 is a test for the Bulls before the Bears grip the market to re-test 22,000–22,500 levels. The broader range for the Nifty is seen at 26,500–22,000 technically, while looking at selling pressure and expensive valuations, the Indian market lags a driving force to take the market higher in the current scenario.

Tradzo's view

Tradzo maintains a cautious view, with a Nifty target of 19,000 – 17,000 for 2026 on global macro-economic headwinds and recessionary tail-risk. Reduce weak long positions in overvalued stocks on trailing valuations — don't lean on over-estimated forward ratios.

What's driving the caution

Earnings

Q1 carries the war's bill

April–June is the quarter the war landed on — crude spiked, Hormuz went half-shut, trade got scrambled. Higher input costs and freight show up now, in results reported through July–August. The market has priced the ceasefire. It hasn't priced the quarter.

Valuations

Rich, with the anchor missing

We're paying up for growth the earnings aren't delivering. The story — war over, rates down, crude softer — is already in the price. That's why good results were sold last quarter: good wasn't good enough.

Indian IT

AI is loudly eating IT

What built Indian IT — billed human hours — is exactly what AI compresses. This is a business-model question, not a one-quarter miss. The market is already marking the sector down.

TCS

−55%

Wipro

−53%

Infosys

−48%

HCLTech

−44%

Tech Mahindra

−24%

Fall from all-time high · closing prices 6 Jul 2026 — all five hit 52-week lows on 1 July. ATHs: TCS ₹4,592 · Wipro ₹370 · Infosys ₹2,006 · HCLTech ₹2,012 · TechM ₹1,854. Source: screener.in / NSE.

Monsoon

Water stress is the quiet chart

Reservoir storage has fallen hard year-on-year. A weak, uneven monsoon means softer rural demand and firmer food inflation — a direct hit to the "growth plus rate cuts" thesis the market leans on.

2 Jul 2025

78.1 BCM

10-yr average

48.4 BCM

2 Jul 2026

47.7 BCM

Live storage at 61% of last year and below the 10-year average — an inflation and rural-demand risk, not a footnote.

The real risk is offshore

Two things India can't control: US AI credit and the yen

On 28 June the BIS — the central banks' central bank — named an AI-capex bust, circular financing, and record sovereign debt as the top three threats to global financial stability. AI capex drove roughly 74% of US GDP growth in Q1 2026, so a pause there isn't a sector wobble — it's a macro event. The financing runs in a circle, and it's been discussed openly for months: Nvidia funds OpenAI, OpenAI buys Nvidia chips, Microsoft owns a slice and sells it cloud — the same dollar inflating several companies' numbers at once. And the cashflows don't match the story: OpenAI is roughly $13bn of revenue against ~$1.4 trillion in commitments, increasingly funded by private credit. Separately, USD/JPY touched a 40-year low near 162.84; positioning echoes July 2024, the setup before the August carry-trade unwind that dragged the Nifty down with it. If either cracks, risk-off means FIIs pull money out of everything — India included, regardless of how our own prints look that week.

OpenAI revenue

~$13B

Commitments

~$1.4T

~100× today's revenue. To be fair to the other side: some of this capex is funded by real cashflow, and today's mega-caps aren't priced like 2000. The worry isn't that the bull case is wrong — it's the asymmetry of how much of the global tape now rides on one bet going right.

The Risk board

Risk	What the data says	Why it matters for India	Heat
Q1 earnings	The war quarter — elevated crude and disrupted trade land in Jul–Aug results.	Rich valuations have no cushion if numbers and guidance disappoint.	High
Yen / carry	USD/JPY near a 40-year low (162.84); positioning echoes July 2024.	A forced BoJ defence unwinds global carry — risk-off hits FII flows here.	High
Monsoon / food	Reservoirs at 47.7 BCM vs 78.1 a year ago, below the 10-yr average.	Weak, uneven rain lifts food inflation and clouds rural demand.	High
US AI credit	BIS flags an AI-capex bust as a top-3 global risk; OpenAI ~$13B vs ~$1.4T.	If the US AI trade cracks, spillover repricing reaches Indian risk assets.	Medium
Iran truce	MoU signed and crude has eased, but violations continue and Hormuz stays half-shut.	One flare-up and crude is back up — undoing the cheaper-oil premise of this rally.	Watch

Bottom line

The market has left the war behind, not the math behind — rich valuations, soft domestic demand, an earnings quarter that ate a war, a stressed monsoon, and two offshore risks India can't control.

The bounce can run to 24,750 – 25,000. Treat that as a place to be careful, not brave — trim into strength, keep dry powder, and let the earnings tell you the truth the price is still avoiding.

If you cant mathematically back the higher highs, its time to step aside.

Investment in the securities market is subject to market risk. Read all the related documents carefully before investing. Registration granted by SEBI and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

Disclosure of interest. Tradzo Research, its clients, or the analyst may hold positions (long or short) in the Nifty or in the securities and instruments mentioned in this report. Tradzo Research is a Registered Partnership firm and a SEBI-Registered Research Analyst (Reg. No. INH000024675) under the SEBI (Research Analyst) Regulations, 2014, and provides research recommendations only.

Nature of this note. All index levels, ranges and “targets” above are technical and analytical scenarios — not assurances of any outcome; markets can behave contrary to any stated view, and the value of investments can go up or down. Trading in Futures & Options carries a substantial risk of loss. Past performance is not indicative of future results.

Data sources. Nifty chart & levels — TradingView (NSE, weekly); GST collections — Ministry of Finance / GSTN; reservoir storage — CWC / IMD; USD/JPY — Reuters; global financial-stability risk — BIS Annual Economic Report (28 Jun 2026); IT-sector prices & drawdowns — screener.in (NSE, close 6 Jul 2026); company figures — public filings and reputable media.

AI Disclosure: AI is used to gather some information and design the report, analysis remains at analyst's discretion.

Read the SEBI-prescribed Combined Risk Disclosure & full disclosures →

Tradzo Research — SEBI-Registered Research Analyst · Reg. No. INH000024675. Research Analyst: Harsh Patel, CFA L2 · support@tradzo.in. Registered Office: A-416 Sumel 11, Nr. Namaste Circle, Shahibaug, Ahmedabad, Gujarat 380004 · www.tradzo.in. Grievances: email support@tradzo.in; if unresolved, lodge a complaint on SEBI SCORES (scores.sebi.gov.in) or Smart ODR (smartodr.in).