Indian equity benchmarks are expected to open higher, potentially continuing a modest weekly rise, as companies release business updates ahead of the quarterly earnings season. However, persistent foreign fund outflows could temper investor enthusiasm.
The Gift Nifty futures (GIFc1) were trading at 26,338, suggesting that the Nifty 50 will likely open above Thursday's close of 26,146.55. The Nifty 50 has seen a gain of 0.4% this week, while the BSE Sensex has increased by 0.2%, amidst relatively thin trading volumes due to the Christmas and New Year holidays in major global markets.
In December, the benchmarks experienced slight declines amid a lack of significant catalysts and an unresolved India-U.S. trade agreement. Market participants are now likely to pay close attention to business updates from banks and other companies in anticipation of the quarterly earnings season. These updates are expected to provide insights into the recovery of earnings growth, potentially offering near-term direction for the market.
However, foreign portfolio investors (FPIs) have been selling, with outflows reaching 32.69 billion rupees on Thursday alone, marking the seventh consecutive session of net selling. In 2025, foreign investors net sold Indian shares worth $18.5 billion, which led to underperformance from Indian equities when compared to emerging and Asian market peers. However, analysts anticipate a reversal of this trend in 2026 as earnings growth improves.
Individual stocks to watch include those of Sapphire Foods and Devyani International, operators of KFC and Pizza Hut in India, as they are potentially merging in a deal valued at $934 million. This merger could create a significant fast-food franchise within India. South Indian Bank reported an 11.3% increase in gross advances and a 12.2% rise in deposits as of December 31. Hero MotoCorp reported a 40% jump in sales.
On Wednesday, the Nifty futures were trading at 26,234, suggesting a relatively unchanged opening for the Nifty 50 compared to Tuesday's close of 26,177.15. Asian stocks saw a 0.3% increase, mirroring overnight gains on Wall Street following better-than-expected U.S. economic growth data. A strong U.S. GDP figure is generally favorable for Indian IT and pharmaceutical companies, given their substantial revenue share from the U.S. market.
Other stocks in the news include Emcure Pharmaceuticals, whose Gujarat manufacturing facility received a "no action indicated" classification from the U.S. drug regulator following an inspection. Vikran Engineering received an order worth 20.35 billion rupees for developing 600 MW solar power projects in Maharashtra. Coal India's board has given initial approval for listing its subsidiaries, South Eastern Coalfields and Mahanadi Coalfields.
