Sensex, Nifty Open Flat As HDFC Bank Weighs; Broader Markets Outperform

Indian equity benchmarks opened marginally lower on Tuesday as weakness in HDFC Bank offset gains in select metal, cement and technology stocks, while investors assessed easing crude oil prices, foreign fund flows and the ongoing June-quarter earnings season.

At around 9:15 a.m., the Sensex was down 48.23 points, or 0.06%, at 77,660.29, while the Nifty 50 slipped 1.85 points, or 0.01%, to 24,236.65.

Market breadth remained positive, with 1,438 stocks advancing, 883 declining and 141 remaining unchanged.

Among the top gainers on the Nifty were UltraTech Cement, Shriram Finance, Tata Steel, Adani Enterprises and Tech Mahindra, while HDFC Bank, Maruti Suzuki, Eternal, Sun Pharma and Dr Reddy's Laboratories were among the biggest losers.

HDFC Bank Remains Under Pressure

The benchmark indices continued to be weighed down by HDFC Bank, the heaviest-weighted stock on the indices, which declined 1.1% after tumbling 5.1% in the previous session following its June-quarter earnings.

Sectoral performance remained mixed, with six of the 16 major sectoral indices trading in the red. However, the broader market continued to outperform, with the Nifty Smallcap index rising 0.2%, while the Nifty Midcap index traded largely flat.

Asian markets also traded lower, tracking overnight weakness on Wall Street, although softer crude oil prices helped limit losses.

FII Buying Continues; Crude Eases

Foreign institutional investors (FIIs) extended their buying streak into the first half of July after turning net buyers in the second half of June.

FIIs purchased shares worth around ₹15,559 crore during the first half of July, following net inflows of ₹14,105 crore in the second half of June. Consumer services remained their preferred sector, attracting ₹7,361 crore in inflows, followed by metals & mining, healthcare, real estate and financials.

Meanwhile, crude oil prices eased after reports that mediators had proposed a 10-day ceasefire between the US and Iran, raising hopes of reduced geopolitical tensions in West Asia.

At around 9:31 a.m., Brent crude futures for September delivery were trading at $88.48 a barrel, down 0.83%, while WTI crude futures slipped 0.45% to $82.11. On the MCX, August crude futures traded 0.09% lower at ₹7,942.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said crude oil prices will remain the biggest near-term driver for Indian equities.

He said that while the decline in Brent crude towards the $88 level is encouraging, uncertainty surrounding geopolitical developments continues to pose an upside risk to oil prices, which could keep markets cautious. Vijayakumar added that foreign portfolio investor selling has remained modest and is being comfortably absorbed by domestic institutional investors.

He also highlighted the improvement in Kharif sowing, with the sowing deficiency narrowing to 6%, and said inflows through the concessional dollar swap facility have crossed $20 billion, providing support to the rupee.

According to Vijayakumar, the outperformance of the broader market is likely to continue as the June-quarter earnings season progresses. He added that the strong results reported by Paytm point to improving growth prospects for digital businesses.