IT stocks lift Nifty as Q1 earnings season kicks off

Indian benchmark indices opened higher Thursday, building on Wednesday's marginal recovery. The Nifty 50 rose 67.90 points, or 0.28%, to 24,146.40, while the Sensex gained 261.79 points, or 0.34%, to 77,447.22 at 9.17 a.m. Both indices started firmer and extended gains in early trade, with the Nifty at 24,142.10 and the Sensex at 77,388.42 at the open.

Information technology stocks dominated the gainers' list. HCL Technologies advanced 2.40% to ₹1,196, touching a 52-week high on volumes of 2.26 lakh shares. Infosys rose 1.64% to ₹1,094, and Wipro gained 1.26% to ₹176.85. Tech Mahindra added 1.24% to ₹1,517.30. Hindalco, from the metals space, bucked broader sectoral weakness to rise 1.30% to ₹968.20.

On the losing side, SBI Life Insurance fell 0.99% to ₹1,847.90. Bajaj Finserv shed 0.44% to ₹1,841.40, while ONGC slipped 0.27% to ₹246.51. Eicher Motors declined 0.18% to ₹7,391.50, and HDFC Bank eased 0.15% to ₹814.20, though it remained among the most actively traded stocks with nearly 11.96 lakh shares changing hands.

Among the gainers, Infosys (Alpha Score 57/100) and Wipro (46/100) both carry a Moderate label on AlphaScala's proprietary scoring system, while HDFC Bank (45/100) falls in the Mixed category.

The market is watching the Q1 results season closely. Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, expects financials, including banks and NBFCs, to report a good set of numbers, aided by credit growth now running at 18%. He also flagged automobiles as a sector to watch, with growth numbers for Q1 likely to be impressive as the sector continues to show momentum, helped by GST cuts and easy finance availability. Most segments – cars, SUVs, two-wheelers, commercial vehicles, and exports – are doing well, he said.

On platform and digital companies, Vijayakumar noted that Paytm's announcement of a bonus issue at its July 20 board meeting is an important development. "Platform companies which have turned profitable and continue to grow impressively will be rewarded by the market," he said.

Technically, the market remains in a cautious consolidation. Sachin Gupta, VP–Research at Choice Broking, said the immediate trading range for the Nifty is expected between 23,850 and 24,250, while Bank Nifty is likely to trade within the 57,300–58,500 band. He added that volatility is likely to stay contained given the cooling VIX, which eased to 13.27, down 3.49%. Bank Nifty closed the previous session at 57,757.85, up 295.55 points.

Shrikant Chouhan, Head of Equity Research at Kotak Securities, cautioned that 24,000/77,000 continues to serve as key support, and that a decisive breach below this level could accelerate profit booking towards the 50-day Simple Moving Average around 23,800/76,300. He recommended a stock-specific trading approach rather than aggressive directional positions until a clear breakout or breakdown emerges.

Nifty consolidation historically sets up 18% next-year gains: Edelweiss – a pattern that aligns with the current range-bound trading, analysts said.

On institutional flows, Foreign Institutional Investors turned net sellers on July 15, offloading ₹735.83 crore worth of equities, while Domestic Institutional Investors continued their buying streak, purchasing ₹704.93 crore, providing a cushion against FII outflows.

Global cues remain mixed. Softer US inflation data lifted Wall Street overnight and reinforced expectations of a less hawkish Federal Reserve. Asian markets traded sharply lower. Japan's Nikkei 225 fell over 3%, and South Korea's Kospi dropped more than 6% on concerns over West Asia tensions and elevated crude prices. The IMF has warned that prolonged disruptions in the region could pose significant risks to global energy supplies. On the domestic front, the India-UK trade pact came into effect, reducing tariffs on a range of goods and expected to strengthen bilateral services trade over the long term.