Markets open flat amid trade concerns and mixed earnings; banking stocks lead gains

Markets opened on a subdued note on Monday, with benchmark indices trading marginally lower as investors remained cautious following last week’s bearish sentiment and ongoing trade uncertainty between India and the US. The Nifty 50 opened at 24,999.00 against its previous close of 24,968.40 but slipped to 24,930.95, down 37.45 points or 0.15 per cent by 9.45 AM IST. The Sensex opened at 81,918.53 compared to its previous close of 81,757.73 but was trading at 81,701.92, down 55.81 points or 0.07 per cent.

“Last week’s market mood was downbeat, with bearish sentiment fuelled by Trump’s tariff threats, the India-US trade uncertainty, weak Q1 earnings expectations, and FII outflows of ₹6,672 crore,” said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd. However, banking stocks provided some relief to the broader market, with ICICI Bank leading the gaine₹list with a 2.04 per cent rise to ₹1,454.90, followed by HDFC Bank up 1.84 per cent at ₹1,993.40.

“Strong results from HDFC Bank, ICICI Bank, and Reliance have revived bullish hopes. HDFC Bank posted 12 per cent YoY profit growth and announced a 1:1 bonus issue; ICICI Bank reported a 15.5 per cent profit rise; and Reliance saw record quarterly profits across key segments,” Tapse added. Despite Reliance’s strong quarterly performance, the stock was among the top losers, falling 2.23 per cent to ₹1,443.10.

The cement sector showed resilience with UltraTech Cement gaining 1.12 per cent to ₹12,638.00, while metals showed mixed performance. Tata Steel rose 0.71 per cent to ₹163.52 and Hindalco gained 0.55 per cent to ₹679.60, while IndusInd Bank was the worst performer, declining 3.37 per cent to ₹840.70.

Market analysts highlighted concerns about stretched valuations and trade tensions. “The Market Cap to GDP ratio has reached nearly 140 per cent, while the historical average stands around 102 per cent, indicating stretched valuations compared to other emerging markets,” noted VLA Ambala, Co-Founder, Stock Market Today. “This level has been seen only thrice in the past – first in 2007, ahead of the global financial crisis, then in 2010 at the post-recovery peak, and most recently in 2021 during the liquidity-driven rally, each time followed by significant market corrections.”

Trade tensions with the US continued to weigh on specific sectors, particularly solar and energy companies. “The Alliance for American Solar Manufacturing and trade have accused Indian companies of dumping low-cost goods in the US market, undercutting American manufacturers,” Ambala explained. “This has resulted in a formal request for tariffs on solar imports from India, directly affecting companies such as Waaree Energies, Premier Energies, and SW Solar, whose shares have fallen by up to 4 per cent.”

IT services stocks remained under pressure, with Wipro declining 2.15 per cent to ₹261.20, reflecting concerns about the impact of trade policies on technology exports. Consumer goods also faced headwinds, with Tata Consumer falling 1.45 per cent to ₹1,080.00.

Foreign Institutional Investors continued their selling spree, offloading equities worth ₹3,694 crore on July 18, marking their second consecutive session of net selling. However, Domestic Institutional Investors provided support with net purchases worth ₹2,820 crore, continuing their ninth straight session of buying.

“Indian benchmark indices are expected to open on a flat to negative note today, as indicated by the GIFT Nifty, which signals a marginal decline of around 35 points in the Nifty 50,” said Mandar Bhojane, Senior Technical & Derivative Analyst at Choice Equity Broking. “Market sentiment continues to remain mildly indecisive, following a cautious close in the previous session.”

Technical analysts suggested a cautious approach given the current market conditions. “Immediate support is placed at 24,917, with a stronger support zone in the 24,850–24,700 range. A breakdown below this zone could trigger increased selling pressure,” Bhojane noted. “On the upside, 25,000 is acting as immediate resistance, while a decisive breakout above 25,150–25,250 is essential to resume the bullish trend.”

Axis Bank was among the notable decliners, falling 1.34 per cent to ₹1,084.60, despite the overall positive sentiment in the banking sector. The Bank Nifty faced resistance near 56,500 levels, with analysts suggesting a “sell-on-rise” approach within the 55,500–57,000 range.

Commodity markets remained range-bound, with gold and silver holding key support levels amid a stronger dollar. “A stronger dollar, driven by upbeat US economic data, capped gains in precious metals,” said Rahul Kalantri, VP Commodities at Mehta Equities. Oil prices also traded in narrow ranges as geopolitical tensions provided support while a stronger dollar limited gains.

With key earnings from UltraTech Cement and Havells expected today, and the India-US trade pact discussions due by August 1, market participants remained cautious about taking fresh positions. “Traders are advised to follow a cautious ‘sell-on-rise’ approach, backed by strict stop-loss strategies,” analysts recommended, emphasising the need for risk management in the current volatile environment.

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Published on July 21, 2025