Auto, Metal Shares Shine Amid Earnings Optimism; Midcaps Outperform Despite Benchmark Weakness
By Our Business Correspondent
Indian equity benchmarks ended lower on Tuesday as investors remained cautious amid rising global crude oil prices, sustained foreign institutional investor (FII) selling and disappointing reaction to HDFC Bank’s quarterly earnings. While frontline indices remained under pressure, the broader market demonstrated resilience, with mid-cap and small-cap stocks outperforming on the back of encouraging corporate earnings and stock-specific buying.
The BSE Sensex declined 238.41 points, or 0.31 per cent, to close at 77,470.11, while the NSE Nifty 50 slipped 50.80 points, or 0.21 per cent, to settle at 24,187.70, ending below the psychologically significant 24,200 level.
Market participants said sentiment remained subdued as Brent crude oil traded close to the $90-a-barrel mark, heightening concerns over imported inflation and its possible impact on corporate profitability. The elevated crude prices are being driven by continuing geopolitical uncertainty in the Middle East and concerns over disruptions to global energy supplies.
HDFC Bank Leads Declines
Among the major drags on the benchmark indices, HDFC Bank emerged as the biggest loser, falling 2.07 per cent after its June quarter earnings failed to meet investor expectations on margins despite reporting healthy business growth.
The country’s largest private sector lender posted a 5 per cent increase in net profit, while gross advances rose 15.4 per cent and deposits increased 13.3 per cent year-on-year. However, investors were disappointed by the bank’s net interest margin (NIM) of 3.26 per cent, which continues to remain significantly below the nearly 4 per cent levels seen before its merger with HDFC Ltd in 2023.
Investor sentiment was further affected by reports suggesting that the bank’s independent directors are conducting an additional review before recommending the reappointment of Chief Executive Officer Sashidhar Jagdishan to the Reserve Bank of India. The development comes months after former chairman Atanu Chakraborty stepped down in March citing governance concerns, although an independent legal review subsequently found no evidence supporting those allegations.
Besides HDFC Bank, State Bank of India declined 1.48 per cent, while Reliance Industries slipped 1.40 per cent, together accounting for a significant portion of the benchmark decline.
Broader Market Outperforms
Despite weakness in blue-chip counters, the broader market displayed remarkable resilience.
The BSE MidCap Index gained 0.34 per cent, while the BSE SmallCap Index advanced 0.19 per cent, indicating continued investor appetite for quality mid-sized companies with strong earnings prospects.
Market breadth also remained positive. On the Bombay Stock Exchange, 2,188 stocks advanced, 2,021 declined, while 199 shares remained unchanged, suggesting that buying interest remained healthy outside heavyweight stocks.
The India VIX, widely regarded as the market’s fear gauge, declined 2.92 per cent to 12.60, indicating that investors do not currently expect sharp volatility in the near term despite geopolitical uncertainties.
Sectoral Performance Mixed
Sector-wise, the market witnessed divergent trends.
Automobile and metal stocks attracted strong buying support as investors reacted positively to robust quarterly earnings from several companies.
On the other hand, banking, information technology, PSU banking and energy shares ended in the red as investors booked profits and remained cautious over global uncertainties.
Analysts noted that the market continues to favour companies delivering strong earnings growth rather than broad sectoral rallies, leading to increased stock-specific movements.
Global Oil Prices Remain Key Concern
The primary concern for investors remains crude oil.
Brent crude for September delivery rose 53 cents to $89.75 per barrel, remaining close to the $90 mark. Higher oil prices pose risks for India’s current account balance, inflation trajectory and input costs for several industries.
Although hopes of a possible 10-day ceasefire between the United States and Iran provided some relief to global markets, fresh reports of attacks on commercial shipping in the Strait of Hormuz and threats by Yemen’s Iran-backed Houthi rebels to impose a naval blockade on Saudi Arabia kept energy markets on edge.
Market experts believe sustained crude prices above $90 per barrel could complicate the Reserve Bank of India’s inflation management strategy while increasing cost pressures across manufacturing, aviation, logistics and consumer sectors.
Rupee Strengthens Slightly
The Indian rupee managed to post modest gains despite global uncertainties.
The domestic currency traded around 96.25 against the US dollar, compared with its previous close of 96.36, supported by dollar weakness and improved risk sentiment in Asian markets.
Meanwhile, India’s benchmark 10-year government bond yield edged higher to 6.782 per cent, compared with 6.772 per cent in the previous session.
Gold Rises on Safe-Haven Demand
Safe-haven buying lifted precious metals.
MCX Gold futures for August delivery climbed 1.01 per cent to ₹1,42,822 per 10 grams, reflecting investor preference for defensive assets amid geopolitical uncertainty.
The US Dollar Index remained almost unchanged at 100.92, while the benchmark US 10-year Treasury yield eased to 4.587 per cent.
Global Markets Mixed
International markets presented a mixed picture.
European markets traded higher as investors assessed reports of a proposed temporary ceasefire between the United States and Iran. Positive economic data from the United Kingdom also supported sentiment after unemployment eased to 4.9 per cent and employment increased by 148,000 during the three months ended May.
Most Asian equity markets ended in positive territory as hopes of easing geopolitical tensions reduced immediate fears of severe oil supply disruptions.
However, investors remain cautious as developments in the Middle East continue to evolve rapidly.
In the United States, futures pointed to a positive opening with Dow Jones futures rising over 220 points.
Wall Street had ended lower overnight as investors preferred to wait for quarterly earnings from major technology companies including Alphabet and Intel, while monitoring geopolitical developments.
IPO Market Continues to Remain Strong
Primary market activity remained exceptionally robust.
The initial public offering of Caliber Mining and Logistics attracted overwhelming investor interest, receiving bids for more than 114.56 crore shares against an offer size of 78.35 lakh shares, translating into an impressive 146.20 times subscription by Tuesday afternoon.
The IPO, priced in the range of ₹402 to ₹424 per share, closed for subscription on Tuesday.
New Listings Deliver Mixed Performance
Among newly listed companies, SBI Funds Management made a positive debut. The stock listed at ₹610, representing a premium of 6.27 per cent over its issue price of ₹574, and eventually settled at ₹609.90, with over 91 lakh shares changing hands.
In contrast, Alpine Texworld disappointed investors.
Although it debuted at its issue price of ₹105, the stock ended the day at ₹99.75, a discount of 5 per cent.
Earnings Drive Stock-Specific Action
Quarterly earnings remained the biggest driver of stock movements.
TVS Motor Company surged 5.67 per cent after reporting a 51.35 per cent jump in standalone net profit to ₹1,173.97 crore, while revenue increased 38 per cent to ₹13,896 crore. The company also announced plans to raise ₹500 crore through non-convertible debentures.
Karur Vysya Bank emerged among the top gainers, soaring 13.11 per cent after reporting a 44.92 per cent rise in net profit to ₹755.70 crore, supported by healthy growth in total income.
SML Mahindra climbed 2.62 per cent after posting improved sequential profitability, while Canara HSBC Life Insurance advanced 3.43 per cent following healthy quarterly earnings.
Jewellery retailer BlueStone Jewellery and Lifestyle hit the upper circuit, surging 20 per cent after reporting a turnaround from losses to profits during the June quarter.
Among the losers, Paytm (One 97 Communications) declined 3.86 per cent despite reporting strong earnings, after its board decided not to proceed with a proposed bonus issue.
Bajaj Auto slipped 0.92 per cent despite posting record quarterly revenue and a 42.3 per cent increase in profit, indicating that investors may have already priced in the strong performance.
Kirloskar Pneumatic dropped 6.12 per cent after reporting a sharp sequential decline in profitability.
Outlook
Market analysts believe Indian equities are likely to remain sensitive to three key factors over the coming sessions—global crude oil prices, developments in the Middle East and the ongoing corporate earnings season.
Investors will also closely monitor foreign institutional investment flows, domestic macroeconomic indicators and upcoming earnings from large-cap companies to assess whether the current consolidation phase continues or gives way to renewed buying.
With broader market participation remaining healthy and earnings momentum supporting selective sectors, experts expect stock-specific opportunities to continue even if benchmark indices remain range-bound in the near term.
Disclaimer: This report is based on market data, company disclosures and publicly available information as of the close of trading on July 21, 2026. Equity investments are subject to market risks. Readers are advised to consult qualified financial advisers before making any investment decisions. This article is intended solely for informational and journalistic purposes and should not be construed as investment advice.