Sensex, Nifty Open Higher As FII Buying Offsets IT Profit Booking

Indian benchmark indices opened higher on Friday, the final trading session of July, tracking gains in global equities and sustained foreign institutional investor (FII) buying, although sharp profit booking in information technology (IT) stocks limited the upside.

At around 9:18 am, the Sensex was up 76.90 points, or 0.10%, at 78,005.05, while the Nifty 50 gained 39.85 points, or 0.16%, to 24,357.

IT Stocks Witness Profit Booking

The Nifty IT index declined more than 3% in early trade as investors booked profits after the sector's sharp rally in July.

All constituents of the index traded in the red. Persistent Systems fell 4.07%, while TCS dropped 3.45%, Infosys declined 3.32%, HCL Technologies lost 3.09% and Mphasis slipped 3.01%.

Among the Nifty 50 stocks, Bajaj Finance led the gainers with a rise of 3.58%, followed by Bajaj Finserv (2.64%), Mahindra & Mahindra (1.71%), Shriram Finance (1.44%) and Hindalco Industries (1.01%).

On the losing side, Infosys, TCS, HCL Technologies, Wipro and Tech Mahindra were the biggest drags on the benchmark.

Global Cues, FII Buying Support Sentiment

Market sentiment remained supported by a strong overnight rally on Wall Street after upbeat guidance from Microsoft revived optimism around global technology stocks.

Foreign portfolio investors also remained supportive, purchasing more than ₹3,600 crore worth of Indian equities in the previous session, extending their recent buying streak.

Asian markets traded firmly, with South Korea's Kospi and Japan's Nikkei advancing as regional risk appetite improved.

Crude Oil, Geopolitical Risks Remain Key Monitorables

Despite positive global cues, investors remained watchful of rising geopolitical tensions between the United States and Iran, which kept WTI crude oil near $84 per barrel.

Higher crude oil prices could increase India's import bill, fuel inflationary pressures and weigh on the rupee if the uptrend persists.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said global technology stocks, particularly in South Korea, are witnessing extraordinary volatility driven by earnings expectations and speculative trading.

He noted that sharp swings in Samsung Electronics and SK Hynix, which together account for more than half of the KOSPI's market capitalisation, may be prompting institutional investors to shift towards more stable markets such as India.

According to Vijayakumar, foreign investors have bought ₹7,360 crore worth of Indian equities over the last three sessions, and if the trend continues, it could provide resilience to the domestic market. He added that the June-quarter earnings released so far indicate a revival in earnings growth momentum, while fair valuations in large-cap stocks continue to support the investment outlook.