Indian Equities Begin Week on a Positive Note

On Monday, Indian equities opened higher, buoyed by mixed signals from Asian markets. The Nifty index started strong with a gap-up of 0.44 percent, climbing 108.8 points to settle at 24,962.85. Meanwhile, the BSE Sensex gained 0.59 percent, adding 476.66 points to reach 81,701.41.

The Bank Nifty index continued its upward trend from the previous day, benefiting from positive movements in key banking stocks such as HDFC Bank, ICICI Bank, Axis Bank, SBI, and Federal Bank. Specifically, HDFC Bank's stock surged following a stable performance in its Q2 results, with net interest margins largely consistent on a year-on-year basis. Notably, global brokerage firm Goldman Sachs reaffirmed a buy rating on HDFC Bank, citing a target price that suggests a potential increase of 28 percent.

As trading progressed, HDFC Bank shares demonstrated impressive gains of 2.9 percent, or Rs 48.75, reaching Rs 1,729.9. At its session peak, the stock hit Rs 1,734.45. Previously, it achieved an all-time high of Rs 1,791.9 per share back on July 3, 2024.

However, not all sectors enjoyed this positive momentum. Indices like Auto, FMCG, Media, and Oil & Gas saw declines, reflecting a mixed performance across the board.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, indicated that the record highs set by US markets have helped maintain a global stock market rally. The steady decline in crude oil prices and stable US bond yields have contributed to resilience in stock markets, even amidst ongoing tensions in the Middle East.

Additionally, the hopes stemming from stimulus measures in China and the attractive valuations of Chinese stocks could continue to support the tactical shift from 'Sell India, Buy China.' Vijaykumar elaborated that the significant portion of Foreign Institutional Investor's (FII) Assets Under Management (AUM) linked to financials has made these stocks more appealing amid generally overvalued market conditions. He pointed out that Q2 earnings from major banks like HDFC, Kotak, and Axis suggest improving economic prospects.

Asian markets reflected a mixed sentiment on the day, with the Chinese Shanghai Composite Index gaining 0.6 percent following unexpected interest rate cuts by China's People's Bank.

Equities, Market, Banking