Overall Market Performance and Breadth

The large-cap universe saw a subdued session with the index edging lower by 0.28%. Market breadth was negative, with 38 stocks advancing against 60 decliners, resulting in an advance-decline ratio of 0.63x. This skew towards declines highlights the prevailing risk aversion among investors, who appear to be selectively positioning themselves in stocks with resilient fundamentals and defensive characteristics.

Top and Bottom Performers

Bajaj Holdings emerged as the best performer within the large-cap segment, delivering a robust return of 2.26%. The stock’s outperformance can be attributed to its diversified portfolio and steady earnings outlook, which continue to attract investor interest. On the other end of the spectrum, Hindustan Aeronautics Limited (HAL) was the worst performer, declining by 4.32%. The aerospace and defence sector remains under pressure amid concerns over order inflows and margin pressures, which have weighed on HAL’s near-term prospects.

Defensive Stocks Gain Favour

Investor sentiment has clearly favoured defensive large-caps in recent sessions. Stocks such as Titan Company, Asian Paints, and Infosys have demonstrated relative resilience. Titan Company, which is scheduled to declare its quarterly results on 10 Feb 2026, was recently upgraded from a Hold to a Buy rating, reflecting improved earnings visibility and strong brand positioning in the consumer discretionary space. Asian Paints and Infosys have also seen their technical outlooks improve, moving from sideways or mildly bullish to more positive stances, signalling growing investor confidence.

Cyclical Stocks Face Headwinds

Conversely, cyclical sectors such as steel and banking have experienced mixed fortunes. Tata Steel, set to announce results on 6 Feb 2026, remains under watch as commodity price volatility and global demand uncertainties cloud its near-term outlook. Canara Bank, also upgraded from Hold to Buy, and IndusInd Bank, which has shifted from mildly bullish to bullish, reflect selective optimism in the banking sector. However, the broader banking space has seen cautious positioning ahead of SBI’s results due on 7 Feb 2026.

Recent Upgrades and Technical Shifts

Several large-cap stocks have seen upgrades in their ratings and technical calls, signalling a shift in market perception. Titan Company, Canara Bank, and Bajaj Auto have all been upgraded from Hold to Buy, reflecting improved fundamentals and positive earnings revisions. Hero MotoCorp and Adani Power have moved from mildly bullish to bullish technical stances, while Asian Paints and Infosys have improved from sideways or bullish to mildly bullish, indicating strengthening momentum.

Upcoming Earnings to Watch

Market participants are closely monitoring the earnings calendar, with several heavyweight large-caps set to report in the coming days. Tata Steel and Shree Cement will announce results on 6 Feb 2026, followed by SBI on 7 Feb 2026. Titan Company and Samvardhana Motherson are scheduled for 10 Feb 2026. These results are expected to provide further clarity on sectoral trends and earnings momentum, potentially influencing large-cap index direction in the near term.

Sectoral Trends: Defensive Versus Cyclical

The current market environment favours defensive sectors such as consumer staples, IT, and select financials, which offer earnings stability amid macroeconomic uncertainties. Stocks like Titan Company and Infosys exemplify this trend, benefiting from steady demand and resilient business models. In contrast, cyclical sectors including steel, automobiles, and capital goods face headwinds from raw material cost pressures, global demand fluctuations, and cautious capital expenditure plans.

Investor Takeaway

For investors, the large-cap segment presents a nuanced landscape. While the overall index has declined marginally, selective opportunities exist in stocks with strong fundamentals and improving technicals. The recent upgrades in ratings for key large-caps suggest a cautious but constructive outlook. However, the negative breadth and underperformance of certain cyclical stocks warrant a measured approach, favouring quality and defensive positioning ahead of upcoming earnings.

Conclusion

The large-cap segment remains a critical barometer of market sentiment, reflecting a blend of cautious optimism and selective risk-taking. Defensive stocks have outperformed amid macroeconomic uncertainties, while cyclical names continue to face pressure from external and internal challenges. Upcoming earnings announcements will be pivotal in shaping the near-term trajectory of the large-cap index. Investors are advised to focus on quality names with improving fundamentals and technicals, balancing growth potential with risk management in this evolving market environment.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →