Sensex, Nifty Edge Higher as Autos and Financials Offset IT Weakness

Indian equities traded with a mildly positive bias on Friday, July 31, but sharp profit booking in technology shares capped the upside. At around noon, the Sensex was up 116.49 points, or 0.15 per cent, at 78,044.64, while the Nifty 50 gained 48.80 points, or 0.20 per cent, to 24,365.95. Market breadth was encouraging, with 2,341 stocks advancing against 1,283 declines.

The broader market outperformed the benchmarks during the morning session. The Nifty Midcap 100 advanced around 0.4 per cent, while the Nifty Smallcap 100 gained nearly 0.7 per cent. Nifty Bank remained largely unchanged around the 57,150 zone as strength in financial services counters was offset by a mixed trend in private banks.

Sectorally, Nifty Financial Services and Nifty Auto gained about 1 per cent each. Financial stocks were supported by Bajaj Finance’s quarterly performance, while auto shares benefited from buying in Mahindra & Mahindra and Hyundai Motor India. Realty, pharma, media and PSU banking stocks also traded higher. Nifty IT was the clear laggard, falling around 2.3 per cent as traders booked profits following a five-session rally. The index has still gained around 16 per cent in July. Nifty FMCG also traded lower.

Among individual stocks, Bajaj Finance jumped around 6 to 7 per cent after standalone net profit rose 28 per cent year on year to Rs 6,081 crore and net interest income increased 23 per cent to Rs 12,571 crore. Hyundai Motor India rallied nearly 7 per cent as brokerages remained constructive on its production outlook, export recovery and product pipeline despite weaker quarterly profit. Astra Microwave surged around 14 per cent after securing an order worth Rs 2,205 crore from Hindustan Aeronautics. Thermax plunged nearly 14 per cent after its June quarter profit dropped 83.4 per cent due to project cost overruns and weaker export sales.

Institutional flows remained supportive in the previous session. Foreign institutional investors were net buyers of Rs 3,623.51 crore in the cash market on July 30, while domestic institutional investors sold shares worth Rs 1,864.03 crore.

Global cues were broadly favourable. Wall Street closed sharply higher as Microsoft and Semiconductor stocks rebounded, while Asian markets were mostly positive. South Korea’s Kospi surged around 17 per cent and Japan’s Nikkei gained nearly 4 per cent, although Hong Kong traded lower. Brent crude eased towards USD 88 per barrel, reducing some pressure on India.

For the rest of the session, the Nifty’s immediate hurdle remains near 24,400, close to its 200 day EMA. A sustained move above this level could open the way towards 24,500 to 24,600, while support is placed at 24,100 to 24,000. Traders should track quarterly earnings, crude oil, the rupee and developments in the Middle East.

This is a live Market commentary and index levels may change during the session.

Disclaimer: The article is for informational purposes only and not investment advice.