Indian equities flatline ahead of Q1 earnings, Europe dips
India's benchmark indices traded sideways as investors braced for quarterly corporate results, while European shares fell despite forecasts for the strongest earnings growth in over three years.
The Sensex gained a single point to close at around 77,187, while the Nifty 50 dropped roughly 6 points to settle near 24,073. Broader market pressure was more apparent, with the Nifty Midcap 100 and Nifty Smallcap 100 indices both slipping up to 0.4%. Decliners outnumbered advancers, with 1,774 stocks falling against 1,542 advances on the NSE.
Trading direction is currently dictated by the impending first-quarter earnings season. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, noted that market reactions will be closely tied to corporate results in the coming days. He highlighted financials and autos as key areas of strength, with digital platform companies also expected to post robust growth.
“Financials-both banks and NBFCs- are likely to report a good set of numbers aided by robust credit growth now running at 18%,” Vijayakumar said. He added that “automobiles is a sector to watch closely since the growth numbers for Q1 would be impressive and the sector continues to exhibit momentum, aided by GST cuts and easy availability of finance,” noting that cars, SUVs, two-wheelers, commercial vehicles, and exports are all performing well.
From a technical standpoint, the Nifty is trapped in a tight consolidation phase. Vatsal Bhuva, Technical Analyst at LKP Securities, identified a support band of 23,950–24,000 and immediate resistance at 24,250–24,300. “Option chain data also indicates the highest put writing at the 24,000 strike, reinforcing it as a key support level,” Bhuva said, adding that “considering the current technical setup, a buy-on-dips near support and sell-on-rise near resistance strategy remains appropriate.”
European equities faced downward pressure during the same session, with the pan-European STOXX 600 index shedding 0.4% to close at 638.83 points. Utilities led the sectoral declines, dropping 1.1%. The losses came despite benign US inflation data keeping the dollar and bond yields in check, as tech weaknesses in Asia and rising oil prices tied to the Iran conflict weighed on sentiment.
However, the underlying fundamentals for European blue-chips remain robust. LSEG IBES data forecasts STOXX 600 companies will post 16.7% earnings growth for the second quarter. This would mark the strongest earnings expansion for the benchmark in more than three years, driven primarily by a surge in energy-sector profits.
In India, stock-specific activity highlighted a divergence in sentiment. MRPL led the most active stocks by both value and volume, followed by heavy turnover in Dixon Tech and significant trading in Vodafone Idea. Momentum favored energy and industrial names, with Emmvee Photovoltaic, Chennai Petro, ABB India, and BHEL all hitting 52-week highs. Conversely, insurance and asset management stocks faced severe selling pressure, pushing ICICI Lombard and Go Digit General Insurance to 52-week lows.
