Pre-Open Points To Uptick At Start After Bank Earnings

Mumbai, October 19: Indian shares edged higher at pre open pointing to an uptick at the start as heavyweight private sector lenders posted their earnings over the weekend.

Nifty 50 rose 0.14% while Sensex rose 0.2% at pre open.  

The Nifty 50 and Sensex rallied around 3% last week, marking their strongest weekly gains in six months, as better-than-expected quarterly earnings lifted IT stocks and a global selloff in AI-linked shares triggered value-buying in other sectors.  

ICICI Bank reported a stronger-than-expected September-quarter profit, supported by robust loan growth and lower provisions for bad loans.  

Foreign portfolio investors (FPIs) returned as net buyers of Indian equities on Friday after 15 consecutive sessions of selling, purchasing shares worth Rs 1,166 crore ($122.79 million), according to provisional NSE data. Domestic institutional investors (DIIs), however, were net sellers, offloading equities worth Rs 3,661 crore.  

Axis Bank reported a rise in September-quarter profit, but the result fell marginally short of market expectations as higher operating expenses and weaker other income offset strong credit growth and lower provisions for bad loans.  

Punjab National Bank posted a 12.8% year-on-year increase in net profit for the quarter.  

LTM (LTIMindtree) reported September-quarter revenue above analysts’ estimates, supported by strength in its consumer and technology businesses.  

Yes Bank’s September-quarter net profit jumped 65% year-on-year. However, the lender clarified that its results did not account for the impact of a Supreme Court ruling last week that overturned the 2020 write-off of Rs 8,400 crore worth of additional tier-1 (AT1) bonds, as the bank plans to pursue a further appeal. 

Asian Markets 

Asian equities traded lower on Monday, with technology stocks under pressure amid concerns over the massive capital expenditure required to build artificial intelligence infrastructure. Japan’s Nikkei 225 fell 1.2%, South Korea’s Kospi slipped 0.06%, and Taiwan’s benchmark declined 1.4%. 

China’s blue-chip CSI 300 index reversed early losses to rise 0.3%, after data showed that the world’s second-largest economy grew 4.5% year-on-year in the July-September quarter, marginally exceeding expectations. Retail sales rose 1.1%, while industrial output expanded 5.5%. 

Investors are assessing whether anticipated earnings growth from major technology companies will justify their substantial AI investments. Results from several prominent US technology and semiconductor companies due this week could influence sentiment across global equity markets. 

US, European Futures 

US stock futures advanced, offering some support to global sentiment despite weakness across Asia. S&P 500 futures rose 0.7%, while Nasdaq futures gained 1.2%, supported partly by falling oil prices and a retreat in US Treasury yields. 

Investors will watch results from companies including Meta Platforms and Tesla, alongside semiconductor firms, for indications of whether spending on AI infrastructure can translate into sustainable earnings growth. The Philadelphia Semiconductor Index fell 11.4% last week, marking its longest losing streak since 2008. 

European markets presented a mixed picture, with EURO STOXX 50 futures declining 0.3% and Germany’s DAX futures falling 0.2%, while Britain’s FTSE futures rose 0.4%. Political uncertainty in France added to investor caution. 

Crude Oil Prices 

Oil prices declined after US President Donald Trump indicated a possible easing of some sanctions on Russia, although he subsequently said a final decision had not been made. Brent crude futures fell 1.7% to around $108 per barrel, while US West Texas Intermediate crude slipped 0.7% to $100.7. 

However, geopolitical tensions continued to pose risks to supply. Iran reported that another tanker had struck a mine in the Strait of Hormuz, keeping concerns over potential disruptions to a key global oil transit route alive. 

For India, a sustained decline in crude prices could ease imported inflation and pressure on the rupee. However, oil prices remain elevated, while foreign investor outflows and global uncertainty could limit gains in domestic equities. 

Source

• Exchanges