Mumbai: Indian equity markets are expected to open on a positive note today, led by strong quarterly earnings from top private sector lenders HDFC Bank and ICICI Bank. The benchmark indices Nifty 50 and Sensex are poised for moderate gains as investor sentiment improves, driven by better-than-expected financial performances from the country’s leading banks.
The June quarter results from HDFC Bank and ICICI Bank acted as a key catalyst in uplifting market confidence. ICICI Bank reported a 15.5% year-on-year surge in net profit, surpassing market estimates and reflecting robust growth across retail and corporate lending segments. HDFC Bank too posted strong earnings, with a steady rise in net interest income and improved asset quality.
Both banks have received favorable outlooks from top brokerages. Analysts at Nomura and ICICI Direct revised their target prices upward and reaffirmed their “Buy” ratings on the stocks. The banking sector, which makes up a significant portion of the Nifty index, responded positively, lifting the Nifty Bank index by approximately 0.6% on Monday and setting the stage for continued momentum.
However, gains were partially tempered by a sharp decline in Reliance Industries’ stock, which slipped nearly 2% following underwhelming earnings from its oil-to-chemicals and retail segments. Despite the company's performance in its telecom arm Jio, the broader reaction reflected investor concern about the uneven performance across business verticals.
This divergence among heavyweight stocks created a mixed scenario for the indices. While bank-led momentum provided upside, Reliance’s decline exerted downward pressure, limiting the overall scale of gains on the bourses.
Foreign institutional investors (FIIs) continued their selling streak, offloading around $195 million worth of equities on Monday. However, strong domestic institutional investor (DII) activity helped offset the pressure, with purchases amounting to approximately $428 million. This influx of domestic capital suggests continued faith in India’s growth story, even amid global uncertainties.
Markets also remain sensitive to global macroeconomic indicators. Asian shares showed a cautious trend, taking cues from Wall Street’s mixed closing. With the August 1 deadline for India–U.S. tariff negotiations looming, investors are keeping a close watch on geopolitical developments that could influence trade flows and market confidence.
Furthermore, concerns about China's sluggish economic rebound and volatility in crude oil prices continue to weigh on broader market sentiment, preventing a full-fledged rally despite positive domestic earnings.
Investor focus now shifts to upcoming corporate results, particularly from consumer-facing companies. United Breweries and Colgate-Palmolive India are among the key names expected to announce their quarterly results later today. Their performance will offer further insight into demand trends and consumption resilience, particularly in urban markets.
While banking earnings have lit a short-term spark in Indian markets, sustained growth will depend on broader corporate performance, global economic trends, and clarity on trade policies. For now, the markets are riding a cautiously optimistic wave, with hopes pinned on continued resilience in the banking sector and strong domestic liquidity support.