Indian Equities Start the Week on a Positive Note

On Monday, Indian equities opened higher, influenced by mixed signals from Asian markets. The Nifty 50 index started trading with a gap-up of 0.44 percent, jumping 108.8 points to reach 24,962.85. Similarly, the BSE Sensex, comprising 30 prominent companies, rose by 0.59 percent or 476.66 points, settling at 81,701.41.

The Bank Nifty sustained its earlier gains, buoyed by strong performances from major banks such as HDFC Bank, ICICI Bank, Axis Bank, SBI, and Federal Bank. Notably, HDFC Bank experienced a significant uptick following its stable Q2 performance, with its net interest margins (NIMs) remaining consistent year-on-year. In addition, Goldman Sachs, a global brokerage firm, endorsed the stock with a buy recommendation, indicating a potential upside of 28 percent.

As of the latest trading session, HDFC Bank's share price rose by 2.9 percent or Rs 48.75, reaching Rs 1,729.9. During intra-day trading, the stock peaked at Rs 1,734.45 per share. The stock had previously reached an all-time high of Rs 1,791.9 per share on July 3, 2024.

Sector-wise, certain indices, including Auto, FMCG, Media, and Oil & Gas, faced downward pressure.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, remarked that with US markets hitting new record highs, the global stock market rally appears to be maintaining its momentum. The continued decline in crude oil prices, along with stability in US bond yields, adds resilience to the stock market, even amid ongoing geopolitical tensions in the Middle East.

Furthermore, the encouragement from Chinese stimulus measures and attractive valuations of Chinese stocks could enhance the prevailing tactical trade of 'Sell India, Buy China' for a while longer, as stated by Vijayakumar.

He noted that since a significant portion of Foreign Institutional Investor (FII) assets under management are concentrated in financials, ongoing FII selling has rendered these valuations appealing in an otherwise overvalued market. Results from major banks like ICICI Bank, HDFC Bank, and Axis Bank reflect improving growth prospects.

On the international front, Asian markets displayed mixed trends, with China's Shanghai Composite index up by 0.6 percent due to a greater-than-anticipated interest rate cut by the People's Bank of China.

Equities, Nifty, Sensex