Indian Equities Open Higher Amid Mixed Asian Markets

On Monday, Indian equities kicked off trading on a positive note, influenced by mixed performances in Asian markets. The Nifty 50 index saw a gap-up opening, rising by 0.44 percent, or 108.8 points, to reach 24,962.85. Meanwhile, the BSE Sensex climbed by 0.59 percent, gaining 476.66 points to settle at 81,701.41.

The Bank Nifty continued its upward trajectory from last week, benefiting from strengthened performances by major banks such as HDFC Bank, ICICI Bank, Axis Bank, SBI, and Federal Bank. HDFC Bank, in particular, experienced a notable rally after reporting steady Q2 results, with net interest margins (NIMs) remaining relatively stable year-on-year. Global investment firm Goldman Sachs has reiterated a buy recommendation for HDFC Bank, projecting a potential upside of 28 percent for the stock.

As of the most recent trading session, HDFC Bank shares rose by 2.9 percent, or Rs 48.75, to trade at Rs 1,729.9. At its highest point during the day, the stock reached Rs 1,734.45. The shares previously hit an all-time high of Rs 1,791.9 on July 3, 2024.

Sector-wise, some indices such as Auto, FMCG (Fast-Moving Consumer Goods), Media, and Oil & Gas displayed negative trends.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, stated that the ongoing rally in global stock markets appears solid, particularly with US markets hitting new record highs. The consistent decrease in crude oil prices and stability in US bond yields help maintain resilience in the stock market, despite ongoing geopolitical tensions in the Middle East.

Furthermore, the potential impact of Chinese stimulus measures, coupled with attractive valuation figures for Chinese stocks, could prolong the 'Sell India, Buy China' strategy for investors, as pointed out by Vijayakumar.

Given that a considerable portion of Foreign Institutional Investors' (FII) assets under management (AUM) consist of financial stocks, the ongoing selling by FIIs has rendered these stocks more appealing in what is perceived as an overvalued market. The Q2 results from leading banking institutions like HDFC, Kotak, and Axis indicate positive growth prospects as noted by Vijayakumar.

In the broader Asian market context, trading has been mixed, with China's Shanghai Composite index currently up by 0.6 percent, following unexpected rate cuts by the People's Bank of China.

Equities, Nifty, Banking