Indian benchmark indices experienced a downturn on Friday, mirroring global uncertainties and the impact of disappointing earnings reports from key companies. Both the BSE Sensex and the NSE Nifty started the day on a weak note and continued to trade negatively.
Market Performance:
- Sensex: The BSE Sensex fell by approximately 300 points, settling around 82,915.33. In the previous trading session, the Sensex had closed at 83,190.28, marking a decline of 0.41% or 345.80 points.
- Nifty: The NSE Nifty also experienced a decline, trading below the 25,300 mark at 25,255.50. This represents a drop of 0.47% or 120.85 points from its previous close of 25,355.25.
Sectoral Performance:
The IT sector was among the major losers, with the Nifty IT index slipping over 1%. This decline was primarily attributed to disappointing Q1 results from Tata Consultancy Services (TCS) and cautious investor sentiment towards the IT sector. However, TCS shares bucked the trend and managed to rise 0.4% by the close.
Key Stocks in Focus:
- Infosys: Infosys was among the top losers, with its stock price down by approximately 1.1%. The stock traded at ₹1,615.80, a decrease of ₹17.9. Over the past six months, Infosys has seen negative returns of -15.73%.
- HCL Tech: HCL Technologies also faced selling pressure, although it experienced a 0.69% increase, trading at ₹1679.5.
- Mankind Pharma: bucked the trend, with analysts suggesting a bullish outlook for the stock.
Factors Influencing the Market:
Several factors contributed to the negative sentiment in the market:
- Global Uncertainty: Concerns regarding the delayed US-India trade deal and rising trade tensions due to President Trump's hints at raising blanket tariffs to 15% or 20%.
- Weak Earnings: Disappointing Q1 results from key companies like TCS, IREDA, and Tata Elxsi dampened investor sentiment. TCS's Q1 FY26 net profit rose 6%, but revenue growth missed estimates, impacting the IT sector.
- Bearish Derivatives Data: Derivatives data indicated a bearish undertone, with strong resistance at the 25,500 level. The Put-Call Ratio held steady at 0.69, reflecting a lack of confidence in immediate upside.
- Mixed Global Cues: While European markets traded positively, U.S. futures traded marginally lower, indicating cautious investor sentiment. Asian markets also traded mixed.
Analyst Recommendations:
Analysts recommend a selective and cautious approach during the earnings season, with a close watch on global and domestic triggers. Despite the current downturn, domestic institutional investors (DIIs) have remained net buyers in July, which may help cushion any sharp declines.
Overall Market Sentiment:
The broader market is expected to consolidate in a downward band, with stock-specific movements driven by Q1 results. Experts suggest that the short-term trend for Nifty is likely to remain weak, potentially leading to further downside.
