After a sharp morning selloff, benchmark indices Nifty and Sensex staged a swift rebound, lifted by strong gains in banking, auto, and metal stocks. Heavyweights like HDFC Bank and ICICI Bank led the recovery, though overall sentiment remained cautious ahead of the looming August 1 trade tariff deadline.
At about 10 am, the Sensex was up 305.46 points or 0.37 percent at 82,063.19, and the Nifty was up 71.05 points or 0.28 percent at 25,039.45. About 1597 shares advanced, 1638 shares declined, and 183 shares remained unchanged.
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"Investors adopted a cautious stance due to the disappointing start of the earnings season and ongoing uncertainty surrounding the US-India trade deal. We expect the index to remain in a consolidation phase with a negative bias in the near term, driven by a weak start to the earnings season and prevailing global uncertainties", Ajit Mishra, Senior Vice President at Religare Broking said.
"Globally, market participants will monitor trade deal updates, which could influence FII flows and currency movements. At the same time, uncertainty persists as global markets recalibrate expectations for Federal Reserve rate cuts, amid sticky inflation and trade-related tensions," he added.
Markets were trading mixed in early hours on July 21, with gains in banking, metals, and auto stocks offset by weakness in oil & gas, IT, and FMCG. The Nifty Bank rose 0.67 percent, led by a 0.70 percent gain in private banks, while Nifty Auto and Metal indices also advanced. On the other hand, Nifty Oil & Gas dropped 0.85 percent, and the IT index slipped 0.47 percent. FMCG, pharma, and consumer durables saw mild declines, while Nifty Media edged up 0.29 percent. Broader markets remained largely flat, with the Nifty Midcap 100 up just 0.07 percent and the Smallcap 100 down 0.18 percent. Meanwhile, India VIX rose 1.4 percent, hinting at a slight increase in market volatility.
HDFC Bank Ltd, India's largest private lender, rose 2 percent after it posted a decent June quarter, with Net Interest Income rising 5.4 percent YoY to Rs 31,438 crore. The bank’s net profit stood at Rs 18,155 crore. The bank also declared a 1:1 bonus issue and a Rs 5 special interim dividend. Nomura, Nuvama Institutional Equities and Bernstein have given a buy call on the stock.
Read more: UltraTech Cement Q1 preview: Net profit, revenue seen rising on volume growth, pricing uptick
ICICI Bank shares gained 2 percent after the lender reported its June quarter results on July 19, showing year-on-year growth in both core income and profitability. CLSA has given an outperform rating, while Nomura has a buy call. Out of 52 analysts, 49 have a 'Buy' and none have suggested a 'Sell'.
Technically, the Nifty remains subdued below its 10-day and 20-day exponential moving averages, both hovering near the 25,200 zone, reinforcing continued supply pressure at higher levels. The short-term structure remains in a downward trajectory. The 25,000–25,200 range has now turned into a formidable supply zone. However, as long as the index holds above the 24,800 mark, there remains a window for near-term support to hold. A decisive close above 25,200 would be required to reverse the short-term bearish tone and shift sentiment in favour of the bulls. Currently, the RSI is trending below the 50 level, underlining a lack of upside momentum and reinforcing the cautious sentiment.
HDFC Bank, Eternal, ICICI Bank, UltraTech Cement and Tata Steel were the top gainers on the Nifty. Laggards on the index included IndusInd Bank, Wipro, Reliance Industries, Tata Consumer Products, and HCL Tech
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