Domestic equity benchmarks opened on a subdued note on Friday, with the Nifty and Sensex slipping marginally as persistent Foreign Portfolio Investor (FPI) outflows and lacklustre IT earnings weighed on investor sentiment. Meanwhile, midcap and smallcap indices showed resilience with modest gains.
The Nifty 50 opened at 25,108.55, down 2.90 points or 0.01 per cent, while the BSE Sensex slipped 65.62 points to begin the session at 82,193.62, a decline of 0.08 per cent.
Banking and market expert Ajay Bagga attributed the lukewarm start to multiple factors, including weak earnings in the technology sector and cautious global sentiment.
“India is seeing continued FPI selling and another underwhelming earnings season for IT so far. As more bellwethers come out with their earnings, the guidance for the rest of the year and the next will provide the catalyst for Indian markets,” Bagga said.
He further flagged international concerns that have unnerved markets. “Markets have been driven by concerns on US deficit and debt, Trump policy uncertainty, tariff’s impact and the White House criticism of the US Fed and Chair Powell, with markets unnerved by talk of Trump firing Powell. However, strong earnings and a stable US economy is providing a silver lining which markets are grasping to rally to all-time highs,” he added.
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Technical indicators also pointed to potential bearish momentum, according to Akshay Chinchalkar, Head of Research at Axis Securities.
“Technically speaking, the daily candle completed a bearish engulfing pattern, and that's not surprising given that we'd mentioned that closing above 25245 and then 25340 was essential for bulls to make a comeback. So, 25000 remains the support level to watch while 25340 is vital resistance. Asian cues are mostly bullish this morning along with US index futures,” said Chinchalkar.
On the sectoral front, Nifty IT advanced 0.40 per cent, Nifty Metal gained 0.51 per cent, and Nifty Auto rose 0.23 per cent. Meanwhile, Nifty FMCG, Pharma, and PSU Bank indices declined in early trade.
As per SBI Securities, sectors such as PSU Bank, Pharma, Healthcare, Automobile, Consumer Durable, FMCG, and Tourism are likely to outperform in the short term, while Defence and IT are expected to underperform.
Nifty Smallcap 100 and Nifty Midcap 100 opened higher, defying the flat tone of broader benchmarks.
Investors are also eyeing key corporate earnings today, with Reliance Industries, Hindustan Zinc, Indian Overseas Bank, LT Finance, Bandhan Bank, Mangalore Refinery and Petrochemicals, and several others set to release their Q1 results.
Elsewhere in Asia, Japan’s Nikkei 225 and South Korea’s KOSPI were trading under pressure. However, Hong Kong’s Hang Seng rose 0.96 per cent, Singapore’s Straits Times gained 0.34 per cent, and Taiwan’s Weighted Index surged 1.15 per cent.
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