Stock markets open higher as IT and Reliance lead gains

Benchmarks opened higher on IT and Reliance gains, but weak breadth, rising crude and foreign selling kept the rally vulnerable to reversal during Friday trade

New Delhi: Indian equity benchmarks opened higher on Friday, led by technology stocks, Reliance Industries and Jio Financial Services, even as weak global markets, rising crude oil prices and continued foreign selling kept investors cautious.

The Sensex gained 349.05 points, or 0.45%, to open at 77,535.92. The Nifty 50 rose 90.85 points, or 0.38%, to 24,163.60.

The rise in the headline indices was not supported by the broader market. At the opening, 1,045 shares advanced, while 1,187 declined and 156 remained unchanged. The negative market breadth indicated that gains were concentrated in a limited number of large stocks.

Jio Financial Services, Infosys, Tech Mahindra, TCS and HCL Technologies were among the leading Nifty gainers. Wipro, Nestle India, Tata Consumer Products, Hindalco and Cipla were among the early losers.

IT stocks react differently to quarterly results

Technology stocks were the main support for the market, but investors drew a clear distinction between the quarterly performances of Tech Mahindra and Wipro.

Tech Mahindra reported a 31.7% year-on-year increase in quarterly profit to Rs 1,486.3 crore. Revenue rose 17.7% to Rs 15,711.9 crore, while its earnings before interest and tax margin expanded by 330 basis points to 14.4%.

The improvement in profitability helped lift Tech Mahindra and added strength to the broader IT index.

Wipro, however, fell nearly 2% in early trade after its IT services operating margin contracted to 16% from 17.3% a year earlier. Its profit increased only 0.6% to Rs 3,356.3 crore despite a 10.7% rise in IT services revenue.

The contrasting movements showed that investors were looking beyond revenue growth and rewarding companies that demonstrated stronger margins and earnings momentum.

Reliance and Jio Financial support the indices

Reliance Industries gained around 1.4% to trade near Rs 1,311 ahead of its June-quarter results, scheduled to be announced after market hours. The stock’s large weight in the indices helped push the Sensex and Nifty higher.

Jio Financial Services jumped more than 5% after its quarterly profit more than doubled. The stock traded around Rs 248.40 in early deals.

Reliance’s results will be among the most important triggers for the market. Investors will closely track the performance of its oil-to-chemicals, retail and digital businesses, along with management commentary on capital expenditure and consumer demand.

JSW Steel, Federal Bank, RBL Bank, Tata Technologies, Havells India, Poonawalla Fincorp and Central Bank of India are also scheduled to report quarterly results on Friday.

Weak earnings punish CEAT and WeWork India

CEAT fell nearly 7% after its quarterly profit declined 96.4% to Rs 4 crore, despite revenue increasing 22.4% to Rs 4,318 crore. The sharp reaction showed that sales growth alone may not protect a stock when margins and profits deteriorate substantially.

WeWork India declined nearly 8%. The company narrowed its quarterly loss to Rs 4.3 crore from Rs 14.1 crore, while revenue rose 27.7% to Rs 683.8 crore. The fall suggested that investors had expected a stronger improvement or had already priced in the revenue growth.

Polycab India fell around 2.7% despite a positive brokerage view, reflecting possible profit-taking after the stock’s 21% rise over the preceding month.

Crude oil and foreign selling remain key risks

The positive start came despite weak overseas cues. The Nasdaq Composite fell 1.47% overnight as semiconductor stocks declined, while the S&P 500 lost 0.51% and the Dow Jones Industrial Average fell 0.20%.

Asian markets also traded lower after the technology-led sell-off on Wall Street. Japan’s Topix fell about 1.3%, while Australian equities and Hang Seng futures declined around 0.3%.

Crude oil prices rose as conflict between the United States and Iran intensified and concerns grew over oil movement through the Strait of Hormuz and the Red Sea. Brent crude climbed above $85 a barrel and was up nearly 12% for the week.

Higher oil prices are a risk for India because they can increase the import bill, put pressure on inflation and weaken the rupee.

The rupee opened slightly stronger at 96.29 against the US dollar, compared with its previous close of 96.35. However, it had depreciated by more than 1% during the week, adding to concerns over foreign fund flows.

Foreign institutional investors sold shares worth a net Rs 4,205.56 crore on Thursday. Domestic institutions bought equities worth Rs 2,986.41 crore, providing only partial support against the foreign outflow.

What retail investors should watch

The opening rise should not be read as evidence of a broad market rally. More stocks declined than advanced, while a handful of index heavyweights accounted for much of the gain.

For retail investors, three signals will matter during the session.

First, the Nifty must sustain its move above 24,150 rather than merely cross it during the opening hour. The 24,200-24,300 region remains an important resistance zone, while 24,000 is the immediate support.

Second, investors should watch whether gains spread beyond IT and Reliance to banks, industrial stocks and the broader market. An index rise accompanied by persistently negative breadth is more vulnerable to reversal.

Third, stocks reacting to quarterly results may remain volatile. Investors should examine profit growth, operating margins, guidance and cash generation rather than buying solely because revenue has increased.