Large-Cap Rally Powers Benchmarks; Broader Market Lags Amid Weak Global Sentiment and Rising Oil Prices
By Our Business Correspondent
Domestic equity markets ended the week on a strong note, shrugging off weak global cues and escalating geopolitical tensions in the Middle East, as robust corporate earnings and aggressive buying in heavyweight banking and technology stocks propelled benchmark indices sharply higher.
The BSE Sensex surged 964.58 points, or 1.25%, to close at 78,151.45, while the NSE Nifty50 climbed 261.55 points, or 1.09%, to settle at 24,334.30, comfortably reclaiming the psychologically significant 24,300 mark.
The rally was driven primarily by strong quarterly earnings from Tech Mahindra, Jio Financial Services and Federal Bank, alongside optimism ahead of Reliance Industries’ June-quarter results, encouraging investors to accumulate large-cap stocks despite continued uncertainty in overseas markets.
Market participants said Friday’s advance was largely concentrated in frontline counters, with institutional investors favouring fundamentally strong companies after the Nifty decisively crossed the important technical resistance level of 24,200. However, weakness persisted in the broader market, indicating that risk appetite remained selective.
Large-Caps Lead the Charge
Among index heavyweights, ICICI Bank gained 2.52%, Reliance Industries advanced 2.48%, while HDFC Bank added 1.55%, together contributing significantly to the benchmark’s nearly 1,000-point rise.
The banking pack attracted fresh buying following encouraging earnings from private sector lenders, while technology stocks rebounded after Tech Mahindra delivered stronger-than-expected quarterly numbers supported by margin expansion and healthy deal wins.
Market experts noted that investors continued to rotate money into quality large-cap stocks amid heightened global uncertainty, preferring companies with strong earnings visibility.
Broader Market Remains Under Pressure
Despite the impressive gains in benchmark indices, market breadth remained weak, highlighting caution beneath the surface.
The BSE MidCap index slipped 0.19%, while the BSE SmallCap index declined 0.76%, reflecting profit booking in broader market stocks after their recent outperformance.
Out of the total traded shares on the BSE, 1,722 stocks advanced, 2,500 declined, while 193 remained unchanged, indicating that declines outnumbered advances despite the sharp rise in benchmark indices.
The India VIX, often referred to as the market’s fear gauge, rose 2.73% to 13.24, suggesting investors continue to hedge against potential volatility arising from geopolitical developments and upcoming earnings announcements.
Markets Watch Oil, Bonds and Currency
Brent crude prices extended their gains as the conflict in the Middle East intensified, with the international benchmark for September delivery rising 1.97% to $85.89 per barrel, raising concerns over imported inflation for oil-dependent economies like India.
In the domestic debt market, the yield on India’s 10-year benchmark government bond edged higher to 6.773% from 6.751% in the previous session.
The Indian rupee strengthened modestly, trading around 96.28 against the US dollar, compared with the previous close of 96.42, supported by gains in domestic equities.
Meanwhile, MCX Gold futures for August delivery rose 0.24% to ₹1,40,687 per 10 grams, reflecting continued demand for safe-haven assets.
Globally, the US Dollar Index remained largely stable near 100.79, while the US 10-year Treasury yield eased to 4.521%.
Global Markets Remain Cautious
While Indian equities ended firmly in positive territory, global markets painted a different picture.
European stocks traded lower as the military confrontation between the United States and Iran entered its sixth consecutive day, heightening concerns over global energy supplies and inflation.
The latest escalation pushed oil prices toward their biggest weekly gain in nearly three months, raising fears that elevated energy costs could complicate the monetary policy outlook for major central banks.
Asian markets also closed mostly lower, weighed down by heavy selling in semiconductor shares amid concerns over technology valuations. South Korean markets remained shut for a public holiday.
US stock futures pointed to another weak opening on Wall Street, with Dow Jones futures falling over 330 points.
Overnight, Wall Street closed in the red as losses in technology shares overshadowed encouraging US economic data, including resilient retail sales, lower jobless claims and stronger regional manufacturing activity.
Corporate Earnings Drive Stock-Specific Action
The ongoing first-quarter earnings season continued to dictate stock-specific movements.
Federal Bank emerged as one of the top gainers, rallying 6.55% after reporting a 36.6% year-on-year increase in standalone net profit to ₹1,176.93 crore, while total income rose to ₹8,286.69 crore.
Tech Mahindra advanced 3.96% after posting a 28.45% jump in consolidated profit after tax to ₹1,465 crore, supported by stronger operating margins and healthy client deal momentum.
Jio Financial Services climbed 2.99% after reporting a remarkable 156% year-on-year rise in consolidated net profit to ₹830 crore during the June quarter.
On the other hand, Wipro slipped 1.04% after sequential profit declined despite modest revenue growth.
Tyre maker CEAT plunged 7.28% after reporting a sharp 96% decline in quarterly net profit, reflecting pressure on margins despite healthy revenue growth.
Polycab India fell nearly 4%, even after reporting robust growth in revenue and profits, as investors booked profits following the stock’s recent rally.
Flexible workspace operator WeWork India Management declined 6.68% after reporting a quarterly net loss on a sequential basis.
Among smaller companies, Amal hit the 20% upper circuit following exceptionally strong earnings, while Indobell Insulations jumped 14.82% after securing fresh domestic orders worth ₹14.75 crore.
Time Technoplast gained 2.43% after winning an order worth ₹38.14 crore from Hindustan Petroleum Corporation Ltd (HPCL) for the supply of composite LPG cylinders.
IPO Corner
The initial public offering of Caliber Mining and Logistics received a positive response on its opening day.
According to NSE data available until Friday evening, the IPO was subscribed 1.17 times, receiving bids for 92.02 lakh shares against the 78.35 lakh shares on offer.
The issue, which opened on July 17, will close on July 21, with a price band of ₹402-424 per share.
Outlook
Market participants expect stock-specific action to continue in the coming week as the earnings season gathers pace. Investors will closely monitor the June-quarter results of several heavyweight companies, including Reliance Industries, alongside developments in the Middle East, crude oil prices, foreign institutional investor flows and global central bank signals for further market direction.
Disclaimer: This market report is intended solely for informational and journalistic purposes and should not be construed as investment advice or a recommendation to buy or sell any security. Investors should consult qualified financial advisors before making investment decisions.