Why Did Sensex and Nifty Open Flat as the Market Prepares for Q1 FY26 Earnings Season?
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Synopsis
The market is bracing for an exciting earnings season with mixed global cues impacting the Indian benchmark indices. Despite selling pressure in the auto and IT sectors, analysts anticipate growth in midcap IT results. Will the upcoming earnings from major banks steer the market in a new direction?
Key Takeaways
- Indian benchmark indices opened flat amid mixed global cues.
- Early selling was observed in the auto and IT sectors.
- Nifty Bank showed a slight increase, reflecting some sector resilience.
- Analysts anticipate a strong earnings season, particularly for midcap IT companies.
- Institutional investors demonstrated positive buying trends.
Mumbai, July 10 (NationPress) The Indian benchmark indices commenced trading on a flat note on Thursday, influenced by mixed global signals, with noticeable selling activities in the auto and IT sectors during the initial trading hours.
As of approximately 9:29 am, the Sensex was down by 40.96 points or 0.05 percent, standing at 83,495.12, while Nifty slipped by 17.70 points or 0.07 percent, at 25,458.40.
The Nifty Bank showed a slight increase of 29.50 points or 0.05 percent, reaching 57,243.05 in the early session. The Nifty Midcap 100 index climbed to 59,448, gaining 108.40 points or 0.18 percent. Meanwhile, the Nifty Smallcap 100 index was at 19,057.75, up by 50.35 points or 0.26 percent.
Analysts indicate that with trade and tariff updates becoming more routine, the market is gearing up for the commencement of the earnings season.
Vikram Kasat, Head-Advisory at PL Capital, noted, "Major banks such as JPMorgan Chase, Citigroup, and Wells Fargo are slated to report next Tuesday. Currently, analysts predict a 5.8 percent growth in earnings for the S&P 500 in the second quarter."
Although expectations for the IT sector are tempered, analysts believe that midcap IT firms may deliver strong results along with positive feedback.
Experts remarked, "Despite having robust balance sheets and ample liquidity, banks are facing challenges with low credit growth. The outperformers in the banking sector will likely be those demonstrating solid credit growth. In the automotive segment, M&M and Eicher are poised for better performance."
In the Sensex grouping, Tata Steel, Axis Bank, Power Grid, Bajaj Finance, M&M, ICICI Bank, and Titan emerged as the top gainers. Conversely, Tata Motors, Infosys, Sun Pharma, Bharti Airtel, TCS, Asian Paints, NTPC, and HDFC Bank were among the biggest losers.
On the institutional side, foreign institutional investors (FIIs) were net purchasers of equities amounting to Rs 77 crore on July 9, while domestic institutional investors (DIIs) also made net purchases, investing Rs 920 crore on the same day.
In Asian markets, stocks in Hong Kong, Seoul, China, and Jakarta were trading positively, while only Japan was in the negative territory.
In the previous trading session, the Dow Jones in the US closed at 44,458.30, gaining 217.54 points, or 0.49 percent. The S&P 500 saw an increase of 37.74 points, or 0.61 percent, finishing at 6,263.26, and the Nasdaq closed at 20,611.34, up 192.87 points, or 0.94 percent.
Point of View
The current market conditions reflect a cautious optimism as we approach the Q1 FY26 earnings season. While the mixed global cues and sector-specific selling pose challenges, the underlying strength in certain sectors, particularly midcap IT, suggests potential for robust growth. It’s essential for investors to remain informed and agile during this critical period.
NationPress
30/08/2025
Frequently Asked Questions
What factors influenced the flat opening of Sensex and Nifty?
The flat opening of Sensex and Nifty was primarily influenced by mixed global cues and early selling in the auto and IT sectors.
What is expected from the upcoming earnings season?
Analysts are forecasting a 5.8 percent earnings growth for the S&P 500 in the second quarter, with specific attention on major banks' reports.
Which sectors are likely to perform well this earnings season?
While expectations for the IT sector are limited, midcap IT firms are anticipated to post positive results. Additionally, M&M and Eicher in the auto sector are expected to outperform.
How did institutional investors behave recently?
Foreign institutional investors (FIIs) were net buyers of equities worth Rs 77 crore, while domestic institutional investors (DIIs) invested Rs 920 crore on July 9.
What was the performance of Asian markets recently?
In the Asian markets, Hong Kong, Seoul, China, and Jakarta were trading positively, while Japan was the only market showing losses.
