The week carried several overlapping currents: geopolitical tension, a sharp but temporary unraveling in AI-linked stocks, a powerful Microsoft-led rebound, and a quieter but important shift in foreign flows into Indian equities. And there was a shift in the short history of Indian presence on squash courts globally.
The week opened against a backdrop of renewed Middle East friction. Oil prices firmed near $90 after reports of fresh US strikes on Iran and reciprocal actions. Energy markets stayed jittery, while Asian equities started the week mixed. The sharper pressure, however, came from semiconductors and AI-related names. SanDisk was down nearly 58% from its June highs, erasing more than $200 billion in market value. Micron and Seagate moved lower in sympathy. The SOX index slipped below its 50-day moving average for the first time since April 2025.
In Korea, the Kospi fell over 8% at one stage, triggering a brief trading suspension, as investors questioned whether the pace of AI infrastructure spending could be sustained and fretted about rising Chinese competition, including reports of mass production of immersion deep-ultraviolet lithography tools.
Also Read | China's DUV Lithography Breakthrough Clouds AI Trade; ASML, Nvidia, AMD, Micron Futures Slump 5%
That pressure eased later in the week. On Thursday, Microsoft delivered its strongest single-day performance since 2008, rising around 15.5% and adding roughly $450 billion in market value, the largest one-day gain for any company on record. Better-than-expected Azure growth, solid cloud numbers, and capital expenditure that came in below the most aggressive estimates reassured the market that heavy AI investments were beginning to show up in revenue. Wall Street rallied strongly on the back of it. The yen also posted one of its better days in years amid speculation of Japanese intervention. Asian markets, including Korea, found some relief, and there was a reversal in the AI trade.
Central bank commentary remained in focus. The Federal Reserve held rates steady, but three officials dissented in favour of a hike, a rare display of division. Kevin Warsh's remarks the previous evening, while restating the 2% inflation target as non-negotiable, offered little concrete signal of imminent action. Markets largely treated the comments as rhetoric rather than a decisive shift. In Japan, Bank of Japan officials appeared more open to raising rates at a faster pace than the every-six-months consensus, citing the persistent weakness in the yen and evidence that companies were passing on higher costs more quickly. At the time of going to print, the BoJ decision was awaited.
In India, the more constructive development was on the flow side. Foreign portfolio investors, who had sold aggressively earlier in the year, showed clear signs of easing. Net equity outflows that stood at Rs 1.18 lakh crore in March moderated to Rs 60,847 crore in April, Rs 32,963 crore in May and Rs 49,340 crore in June, before flipping to net buying of about Rs 15,400 crore in July (NSDL data up to 30 July). The intense foreign selling that weighed on markets earlier in the year has lost considerable force. Domestic institutions continued to absorb residual supply. Ownership data as of June showed both FIIs and DIIs raising stakes in several stocks — SBI, Shriram Finance, JSW Steel, Tata Steel, Bharti Airtel and NTPC among them. Sectors such as PSU banks, NBFCs, capital goods and logistics also recorded joint increases in institutional ownership.
Earnings season provided a steady undercurrent. Aarti Industries posted a strong recovery quarter: revenue up 42%, EBITDA margin expanding to 16% from 12.7%, and profit rising more than three-and-a-half times. Waaree Energies reported 79% revenue growth and a record order book of Rs 61,500 crore, though margins compressed. Syrma SGS delivered an all-round beat with robust growth across consumer, automotive and railways segments along with margin expansion. Consumption names like Asian Paints were strong. Other notable prints included solid numbers from Torrent Pharma, ACME Solar, Karnataka Bank, Balkrishna Industries and MTAR Technologies. On the weaker side, Thermax saw a sharp drop in profitability, while Syngene and a few others faced pressure. Astra Microwave received a large radar-related order from HAL worth Rs 2,250 crore — more than twice its current topline — taking the order book to roughly four times FY26 revenue.
Elsewhere, Zepto's IPO was put on hold after a tepid response from large mutual funds. The company plans to update its financials before returning to the market. New F&O rules came into effect, ending continuous trading at 3:15 pm and introducing a closing auction session until 3:30 pm. The change is intended to reduce last-minute closing-price manipulation and should improve the integrity of settlement prices, though short-term adjustment for some participants is likely.
On the domestic data front, June Index of Industrial Production (IIP) registered a six-month high of 7.3%, led by manufacturing and a recovery in consumer goods. Power demand has also shown a sharp uptick in recent months. Globally, the conversation around China's demographic and gender imbalances continued, offering a longer-term cautionary backdrop as India navigates its own demographic window.
The week closed with markets digesting the Microsoft-driven relief in global technology while local participants watched the sustained moderation in FII selling and the steady flow of corporate results. And on a brighter note closer home, Anahat Singh became the first Indian ever to win the World Junior Squash Championship, defeating Egypt's Ruqayya Salem 3-0 in the women's singles final. Personally speaking, it was the brightest spot this week for me.
Also Read | Who Is Anahat Singh, India's First Ever Junior Squash Champion?
The worst of the foreign outflow phase appears to be behind us for now. The path ahead will still be shaped by AI valuations, commodity prices and geopolitics, but the signals this week pointed to a gradual shift rather than continued stress.
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