Sensex, Nifty Dip After Weekly Rally; IT, Financials Drag, Derivatives Hint at Bullish Bias

Benchmark Indices Trade Lower on Profit Booking; Broader Setup Remains Constructive Amid Strong Fundamentals and Trade Resilience

After registering solid gains earlier in the week, Indian equity markets cooled off on Friday, with the Sensex falling 241 points to 82,288 and the Nifty losing 63 points to 24,998 as of 1:12 p.m. The decline was largely attributed to profit booking in financial and IT stocks, following the recent strong rally that pushed benchmarks to record highs. Despite the pullback, analysts remain upbeat about the near-term trajectory, underpinned by robust corporate earnings, easing geopolitical risks, and favourable global macroeconomic indicators.

Additionally, the latest trade data showed India’s merchandise exports rose 9.03% year-on-year in April to $38.49 billion, signaling a revival in global demand. However, a sharp 19.12% jump in imports, especially crude oil and electronics, widened the trade deficit to $26.42 billion, a five-month high, slightly tempering market enthusiasm.

Highlights:

• Sensex down 241 points, Nifty lower by 63 points, both retreating after a strong week.

• Financial and IT stocks dragged indices, triggering profit-taking.

• India’s April exports rose 9.03% YoY, but trade deficit hit a five-month high at $26.42 billion.

Technical Indicators Turn Constructive; Options Data Suggest Bullish Sentiment Building

Despite Friday’s correction, technical and derivatives indicators point to continued bullish momentum. The Put-Call Ratio surged from 0.73 to 1.08, indicating a sharp rise in bullish sentiment. At the same time, the India VIX fell 1.93% to 16.89, reflecting cooling volatility and increasing investor confidence.

Max pain remained anchored at 24,850, suggesting a potential range-bound consolidation before a breakout. Analysts also highlighted that Call writers were forced to unwind and shift higher, confirming that resistance levels are moving upward. Meanwhile, Put writers aggressively added positions at higher strikes, particularly in the 24,800–25,000 range, strengthening the support base and confirming the broader bullish undertone.

Highlights:

• Put-Call Ratio surged to 1.08, indicating bullish positioning.

• India VIX fell below 17, suggesting lower volatility and stable market outlook.

• Max pain at 24,850 and strong open interest build-up at 24,800–25,000, reinforcing support zone.

• Resistance levels shifting higher, derivatives structure now supports bullish bias.

BHEL Shares Jump on Strong Q4 Earnings, Dividend Announcement

Bharat Heavy Electricals Ltd (BHEL) shares rallied 3.84% to ₹255.11 on the NSE following a robust earnings announcement. For the quarter ended March 2025, BHEL reported a consolidated net profit of ₹504.45 crore, up from ₹489.62 crore in the same period last year. For FY25, the company posted a full-year profit of ₹533.90 crore, almost doubling from ₹282.22 crore in FY24, driven by better execution and improved order inflow visibility. The board recommended a ₹0.50 per share dividend, further boosting investor sentiment.

Highlights:

• BHEL Q4 profit at ₹504.45 crore, FY25 profit rose 89% YoY to ₹533.90 crore.

• Dividend of ₹0.50 per share announced; stock rallied 3.84%.

• Momentum driven by order book strength and margin improvement.

Mixed Sectoral Performance; IT, Telecom, and Private Banks Drag While Autos and Metals Shine

On the sectoral front, Nifty IT and Private Bank indices traded in the red, mirroring the weakness seen in their heavyweight constituents. Bharti Airtel fell 3% after reports of Singtel offloading a 1.3% stake via a block deal, weighing on telecom sentiment. SBI, IndusInd Bank, Infosys, HCL Tech, and Power Grid also recorded losses up to 2.7%, pressuring the benchmarks.

In contrast, Nifty Auto, Financial Services, Metal, PSU Bank, Realty, and Consumer Durables indices opened in positive territory, underpinned by sustained domestic demand, strong vehicle sales, and improved investor appetite. Stocks like NTPC, Adani Ports, Eicher Motors, Bajaj Finance, and Bajaj Finserv opened higher, continuing their recent uptrend.

Highlights:

• Nifty IT, Private Bank indices declined, dragging broader benchmarks.

• Bharti Airtel fell 3% on stake sale reports; SBI and Infosys also declined.

• Gainers included NTPC, Adani Ports, Bajaj Finance, and Eicher Motors.

Stock-Specific Action: PB Fintech, Akzo Nobel, LIC Housing Finance, RVNL in Focus

Several individual stocks were in focus following earnings announcements and corporate developments. PB Fintech surged 2% after posting a 185% YoY jump in Q4 PAT, signaling strong traction in the digital insurance and fintech space. Akzo Nobel India rallied 6% on reports that JSW Paints had entered exclusive talks to acquire its India operations, sparking M&A-driven optimism.

On the other hand, LIC Housing Finance dipped 2%, despite a 25% YoY rise in Q4 profit, possibly due to margin concerns or tepid guidance. RVNL gained 3% after securing a Rs 160 crore contract from Central Railway, reinforcing the continued infrastructure momentum in railways.

Highlights:

• PB Fintech up 2% as Q4 PAT surged 185% YoY.

• Akzo Nobel India rallied 6% on exclusive buyout talks with JSW Paints.

• LIC Housing Finance down 2%, despite strong earnings.

• RVNL rose 3% after winning a Central Railway project.

Global Market Cues Remain Constructive; Fed Rate Cut Bets Drive Optimism

Asian equities largely mirrored the optimism from Wall Street, where traders continued to price in two US Fed rate cuts for 2025. Treasuries advanced, and equity markets remained buoyant, with the S&P/ASX 200 in Australia rising 0.9%, indicating that liquidity and risk appetite remain healthy across global markets. However, some indices, including Japan’s Topix (-0.4%) and Hang Seng futures (-0.6%), posted minor losses on Friday, hinting at a cautious approach before fresh catalysts emerge.

Highlights:

• S&P/ASX 200 rose 0.9%, reflecting risk-on sentiment.

• Japan’s Topix and Hang Seng futures fell, showing mixed regional trends.

• Traders continue to price in two Fed rate cuts, supporting global equity valuations.