Indian equities rise 1.25% as bank earnings diverge, geopolitical risks loom
Indian stocks surged on Friday driven by index heavyweights, but a flat Monday open looms as Q1 banking results show diverging performance and Middle East tensions curb global risk appetite.
The BSE Sensex climbed 1.25% to close at 78,151.45 on Friday, while the NSE Nifty 50 gained 1.09% to end at 24,334.30. The rally was led by major index constituents positioning ahead of the first-quarter earnings season. However, early indicators point to a muted start for the next session, with the Gift Nifty trading near 24,293, down over 29 points from the previous close.
Geopolitical concerns are overriding domestic corporate momentum. “Investor sentiment is likely to remain cautious as escalating geopolitical tensions in the Middle East continue to cloud the global risk environment, with market participants closely assessing the risk of a broader regional conflict and its potential impact on global energy supplies,” said Ponmudi R, CEO of Enrich Money. He noted that this uncertainty has prompted a defensive stance, limiting investors' willingness to take aggressive directional bets.
First-quarter results from India's major lenders revealed a diverging picture. HDFC Bank reported a mixed quarter, with net profit rising 5% year-on-year to ₹19,059 crore and net interest income up 6.7% to ₹33,534 crore. In contrast, peers showed stronger growth. ICICI Bank's net profit increased 16% to ₹14,804.50 crore, Axis Bank grew its bottom line by 22.5% to ₹7,113 crore, and Yes Bank posted a 33.5% jump in net profit to ₹1,070 crore.
Smaller public sector lenders also held their ground. Punjab & Sind Bank saw net profit climb 23.2% to ₹332 crore, while IDBI Bank reported a 5% increase in net profit to ₹2,115 crore. IDBI also announced that outgoing CEO Ashok Vaswani will step down after more than three years, citing the completion of the bank's transformation journey and the birth of his first grandchild.
Outside the banking sector, Reliance Industries posted consolidated revenue of ₹3.09 lakh crore for the June quarter, a 26.6% year-on-year surge driven by its oil-to-chemicals, oil and gas, and digital services divisions. Separately, Paytm faces fresh legal headwinds after 3i Infotech initiated arbitration proceedings against it regarding a Wi-Fi Monetisation Project.
