IT, auto and capital goods stocks cushion losses, while earnings-driven stock moves and strong IPO demand keep investor interest intact
By Our Business Bureau
Indian equity benchmarks gave up most of their early gains on Thursday as investors turned cautious amid rising geopolitical tensions in the Middle East and mixed global market cues. Although domestic markets opened on a firm note and the Nifty briefly crossed the 24,180 level, profit booking in heavyweight financial stocks erased most of the gains by the close.
The BSE Sensex ended virtually unchanged, adding just 1.44 points to settle at 77,186.67, while the Nifty 50 slipped 5.75 points to close at 24,072.75, remaining below the psychologically important 24,100 mark. During the session, the Nifty touched an intraday high of 24,186.50 before retreating as investors locked in gains.
Market participants remained focused on developments in the Middle East, where the continuing military confrontation between the United States and Iran has kept crude oil prices elevated. Persistent geopolitical uncertainty has renewed concerns over imported inflation, particularly for oil-dependent economies such as India, prompting investors to adopt a cautious approach.
Global sentiment was further dampened by weakness in semiconductor stocks across Asian markets ahead of quarterly earnings from Taiwan Semiconductor Manufacturing Co. (TSMC), a bellwether for the global chip industry. Despite these concerns, buying in information technology, automobile and consumer durable shares prevented a sharper decline in domestic equities.
Broad Market Performance
The broader market presented a mixed picture. The BSE MidCap Index declined 0.30%, while the SmallCap Index managed to edge 0.10% higher, indicating selective buying beyond frontline stocks.
Market breadth, however, remained weak. On the BSE, 2,224 stocks declined, compared with 2,012 advancing shares, while 213 stocks remained unchanged, suggesting that selling pressure outweighed buying across several sectors.
The India VIX, often referred to as the market’s fear gauge, eased 2.92% to 12.88, indicating that despite geopolitical concerns, traders do not currently expect a sharp rise in near-term market volatility.
Technical Outlook
Market analysts said the benchmark indices continue to trade within a narrow range. Technically, the Nifty needs to sustain above the 24,200–24,260 zone to regain bullish momentum. Conversely, a decisive break below 24,000 could trigger another round of selling pressure.
The current consolidation reflects investor caution ahead of further corporate earnings announcements and evolving global developments.
Financial Markets
In the bond market, India’s benchmark 10-year government bond yield eased to 6.753% from the previous close of 6.775%, reflecting steady demand for government securities.
The Indian rupee weakened marginally against the US dollar, trading around 96.33 per dollar, compared with 96.25 in the previous session.
In commodities, MCX Gold futures for August delivery slipped 0.19% to ₹1,41,585 per 10 grams.
Internationally, the US Dollar Index remained largely unchanged at 100.53, while the benchmark US 10-year Treasury yield rose to 4.57%.
Brent crude futures eased marginally to around $84.73 per barrel, but prices remained close to one-month highs as traders continued to monitor the escalating conflict between Washington and Tehran. Higher crude prices remain a key risk for India, given their potential impact on inflation, the current account deficit and corporate profitability.
Global Markets
European equities traded lower as investors assessed the implications of the worsening Middle East conflict on global growth and inflation.
Economic data from the United Kingdom showed that the economy expanded 0.1% in May, supported by growth in the services sector despite rising energy costs. However, declines in manufacturing and construction highlighted the uneven nature of the recovery.
Across Asia, most markets ended in negative territory as technology shares came under pressure. Investors remained cautious ahead of key semiconductor earnings, while softer-than-expected US inflation data supported expectations that the Federal Reserve may keep interest rates unchanged in the near term.
South Korea’s central bank raised its benchmark interest rate to 2.75%, marking its first increase in over three years as policymakers sought to support the weakening won and contain inflationary pressures.
Meanwhile, US equity futures pointed to a positive opening for Wall Street after American markets ended higher overnight. Investor confidence was boosted by encouraging second-quarter earnings from major financial institutions and softer producer price inflation, reinforcing hopes that inflationary pressures in the United States are easing.
Earnings Drive Stock-Specific Action
Corporate earnings remained the primary driver of individual stock movements.
ABB India emerged as one of the top gainers, rising more than 6% after its parent company, ABB Ltd, reported robust second-quarter results and disclosed that order inflows from India surged 81% year-on-year, significantly exceeding market expectations.
Bharat Heavy Electricals Ltd (BHEL) climbed over 5% after reporting a return to profitability in the June quarter. The engineering major posted a consolidated net profit of ₹376.71 crore, compared with a loss a year earlier, while revenue increased more than 40%, reflecting improving execution across projects.
Oil refining major Mangalore Refinery and Petrochemicals Ltd (MRPL) jumped over 10% after swinging back to profit on the back of stronger refining margins and sharply higher revenues.
Solar equipment manufacturer Emmvee Photovoltaic Power also gained nearly 8% after reporting a sharp rise in quarterly earnings driven by higher production volumes and improved operational efficiency.
Among financial stocks, ICICI Lombard General Insurance fell nearly 11%, emerging as one of the day’s biggest losers after reporting a sharp decline in first-quarter profit despite healthy premium growth.
Angel One declined even after posting a more than two-fold increase in quarterly profit, suggesting that investors had already priced in the strong earnings performance.
Other notable movers included Lotus Chocolate, which fell sharply after reporting a steep decline in profit and revenue, while South Indian Bank and Jana Small Finance Bank witnessed relatively muted reactions despite posting healthy quarterly earnings growth.
IPO Market Remains Strong
The primary market continued to witness enthusiastic investor participation.
The SBI Funds Management initial public offering attracted overwhelming demand, receiving subscriptions of over 41 times the shares on offer, highlighting sustained appetite for quality financial sector offerings.
Meanwhile, Alphine Texworld’s IPO achieved full subscription with demand exceeding the issue size by around 1.4 times, reflecting continued interest in small and medium enterprise listings.
Separately, newly listed Laser Power & Infra delivered a strong debut on the BSE, ending its first trading session nearly 23% above its issue price after listing at a premium and witnessing healthy trading volumes.
Outlook
Market experts believe domestic equities are likely to remain range-bound in the near term as investors balance encouraging corporate earnings against external risks. The trajectory of crude oil prices, developments in the US-Iran conflict, global technology earnings and the pace of India’s ongoing earnings season are expected to determine market direction over the coming sessions.
While strong corporate results and resilient domestic fundamentals continue to provide support, geopolitical uncertainty and elevated energy prices are likely to keep volatility high, prompting investors to remain selective in their stock picks.