Sensex and Nifty Open Lower Amid Axis Bank Earnings Disappointment and FII Selloff

Mumbai, July 18: Indian equity benchmarks opened in the red on Friday, continuing their downward trend, primarily due to sustained selling by foreign institutional investors (FIIs) and dampened investor sentiment. A disappointing start to the earnings season, particularly from the financial sector, has further weighed on the markets.

The BSE Sensex dropped by 476.69 points, or 0.58%, to 81,782.55 as of 10:20 IST, while the NSE Nifty slipped by 148.45 points, or 0.59%, to 24,963.00 as of 10:20 IST.

Axis Bank Results Weigh Heavily on Markets

Axis Bank emerged as a significant drag, with its shares tumbling nearly 4% after reporting a 4% year-on-year drop in standalone net profit to ₹5,806 crore for the June quarter. This decline was largely attributed to a sharp rise in provisions, which nearly doubled to ₹3,948 crore from ₹2,039 crore a year earlier. The bank’s Net Interest Income (NII) remained flat at ₹13,560 crore, and its Net Non-Performing Assets (NPA) increased to 0.45% from 0.33% quarter-on-quarter. As of 10:20 IST, Axis Bank was trading at ₹1,115.00, down by 3.86%.

Other major laggards as of 10:20 IST from the Sensex pack included Bharti Airtel, which was down 1.90% to ₹1,893.30, Kotak Mahindra Bank, which fell 1.17% to ₹2,145.30, and Tech Mahindra, down 1.18% to ₹1,545.30. Eternal Ltd was also trading lower by 0.83% at ₹257.50. These declines reflect broader caution across the financial and technology sectors.

Select Stocks Buck the Trend

Despite the overall market weakness, a few stocks managed to hold their ground or post gains as of 10:20 IST. Mahindra & Mahindra saw a positive movement, up 0.09% to ₹3,198.00. Tata Steel gained 0.82% to ₹161.21.

FII Selling Continues to Pressure Markets

Foreign institutional investors (FIIs) have been consistently offloading equities, with exchange data showing sales worth ₹3,694.31 crore on Thursday. This ongoing selling trend has significantly impacted market direction, leading to Indian markets underperforming global peers. The Nifty has declined by 1.6% month-to-date in July, as FIIs have resumed selling after being net buyers for three consecutive months. Unless positive domestic or global developments emerge, this trend of foreign outflows is expected to persist.

Global Cues Mixed

Asian markets presented a mixed picture in early trading. South Korea’s Kospi and Japan’s Nikkei 225 were trading lower, while Shanghai’s SSE Composite Index and Hong Kong’s Hang Seng showed positive momentum. Wall Street, however, closed higher on Thursday, offering some limited support to global sentiment.

Meanwhile, Brent crude saw a marginal dip of 0.04% to USD 69.49 per barrel, offering little relief to the prevailing inflation concerns.

On Thursday, the benchmark indices had also ended in the red, with the Sensex falling 375.24 points to 82,259.24 and the Nifty declining 100.60 points to close at 25,111.45. Market participants are now closely monitoring upcoming corporate earnings reports and global macroeconomic indicators for cues on the market’s future direction.

Market participants now await more corporate earnings and global cues to gauge the direction ahead.

What’s Ahead for the Day

Markets may remain under pressure in the near term amid Axis Bank’s earnings miss, weak financial sector sentiment, and persistent FII outflows. Investor focus will now shift to upcoming Q1 earnings from other major banks and IT firms for potential cues. Any positive surprises could offer a breather. Global markets offer mixed signals, so traders will watch for US Fed commentary, inflation data, and oil price trends. On the domestic front, a reversal may require FII sentiment to stabilise and stronger-than-expected corporate results. Volatility is likely to persist through the session.

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