Indian equities edge up but stall in tight range amid earnings, geopolitics
Indian blue-chip indices ticked higher on Friday but remain trapped in a week-long trading range as uneven IT earnings and rising Middle East tensions weigh on market momentum.
The Nifty 50 rose 0.38% to 24,166.50 and the BSE Sensex gained 0.47% to 77,543.10 in early trading on Friday. However, the move higher did little to alter the market's short-term trajectory, with the benchmark index trapped in a 23,800 to 24,300 consolidation band for a seventh consecutive session.
Information technology stocks were the primary driver of the early advance, pushing the Nifty IT index up 2% as the top-performing sector. Tech Mahindra surged 3% after reporting quarterly revenue that exceeded analyst expectations, supported by strength in its manufacturing vertical and a favorable currency translation from a weaker rupee. Conversely, Wipro dropped 1.7% after missing earnings estimates and issuing a cautious outlook, reinforcing that a broad-based recovery in technology demand has yet to materialize.
Trading activity was heavily skewed toward blue-chip earnings. Reliance Industries climbed 1.1% ahead of its financial results scheduled for after market hours. Lenders HDFC Bank and ICICI Bank each gained around 0.7% as investors positioned for their respective earnings announcements over the weekend.
While the main indices held steady, broader market breadth deteriorated. The Nifty Smallcap index declined 0.6% and the Nifty Midcap index fell 0.4%, indicating that investors are retreating from riskier, smaller names. This pivot toward large-caps aligns with a technical setup showing the Nifty's 20-, 50- and 100-day simple moving averages turning flat. The daily relative strength index is also neutral, signaling a market waiting for a catalyst. A sustained move above 24,200 could push the index toward 24,500, while a breach of 24,000 would likely trigger a decline to 23,800.
Geopolitical overhang
Any upward momentum is facing resistance from escalating geopolitical risks. Military action between the United States and Iran across the Gulf pushed Brent crude up roughly 1% to approximately $85 a barrel. The rising oil price serves as a headwind for India, a major net importer of crude, keeping investor sentiment guarded despite the positive corporate updates.
In the mid-cap space, Axis Securities technical analyst Rajesh Palviya identified specific breakouts. Palviya noted that IIFL Finance cleared a 557 resistance level with a target of 585-600. SRF was cited surpassing a three-month resistance zone of 2,860, targeting 3,000-3,100. HLE Glascoat sustained above a 413-415 resistance zone, pointing to a potential move toward 480-500.
