Nifty slips 0.12% as crude and global yields weigh on Indian equities

Indian equities ended Friday with a mild loss as traders weighed elevated crude prices, renewed Middle East tensions and uncertainty around global bond yields. The market move was narrow rather than disorderly: foreign and domestic institutions were both net buyers, but the buying did not prevent pressure in several large-cap names.

Bharti Airtel, Apollo Hospitals and ICICI Bank were among the reported gainers. Bharti Airtel rose with a broader telecom rally, while Apollo Hospitals reflected strength in healthcare. Hindalco, ONGC and Asian Paints were among the reported laggards. Market reports linked the weakness in metals and energy-related names to soft China demand signals, higher crude and geopolitical uncertainty.

The Reserve Bank of India brought forward the end of the concessional FCNR(B) dollar-rupee swap mobilisation window to August 31 from September 30, citing strong inflows. Banks can continue to use the swap facility for deposits mobilised by August 31 until September 11. The measure should support near-term foreign-currency inflows, although the earlier closure also signals that the RBI considers the response sufficient.

The RBI is also facing representations from large NBFCs over proposed restrictions on revolving credit products. The draft would permit NBFCs to offer term loans but not revolving credit products; the proposal is not yet in force.

India's July CPI inflation rose to 4.45% from 4.38% in June, while food inflation increased to 5.52% from 5.32%. July merchandise exports rose 19.63% year-on-year to US$44.24 billion, but imports grew faster to US$76.22 billion, widening the trade deficit to US$31.98 billion. The combination of firmer food prices, a wider trade gap and higher crude keeps pressure on the currency and on the policy outlook. No fresh IIP, GST or PMI release was identified in the material reviewed.

The immediate global signal is mixed. Asian markets were subdued on Monday as oil remained elevated amid the lack of progress towards ending the Iran conflict. US equities closed lower on Friday after July retail sales contracted 0.6% month-on-month, although the S&P 500 and Nasdaq still recorded a third consecutive weekly gain.

US Treasury yields eased on Monday, with the 10-year yield at 4.684% and the two-year yield at 4.156% in the Reuters report. The softer yields and a weaker dollar provide some relief for emerging-market assets, but the oil shock remains more directly negative for India because of its import bill, inflation and currency sensitivity.

Foreign institutional investors were net buyers of Rs 508.12 crore in Indian equities on August 14, while domestic institutional investors bought Rs 356.40 crore, according to provisional exchange data. The flows offered support, but the session's performance shows that modest cash buying was not enough to offset pressure from macro and commodity concerns.

Engineers India reported standalone first-quarter profit of Rs 108.6 crore, up 55% year-on-year from Rs 70.1 crore, while revenue fell 6.6% year-on-year to Rs 800.9 crore from Rs 857.1 crore. The result was therefore stronger on profit but weaker on revenue against the year-ago quarter; a market consensus comparison was not available.

Galaxy Surfactants reported first-quarter profit of Rs 165.9 crore, up 108.7% year-on-year and 165.8% quarter-on-quarter. Revenue rose 38.5% year-on-year to Rs 1,785.2 crore and EBITDA increased 86.9% year-on-year to Rs 252.5 crore. No analyst consensus or company guidance comparison was available in the material reviewed.

Bharti Airtel, HAL, Havells and Dr Reddy's Laboratories are among the stocks reported to be in focus during the week. The available material did not provide new company guidance, order wins, ratings actions or management changes for these companies.

The primary market remains active. Horizon Industrial Parks, backed by Blackstone, and Lalithaa Jewellery Mart are scheduled to open on August 17 and close on August 19. The reported IPO pipeline for the week also includes Shankesh Jewellers, Sunshine Pictures, Gaja Alternative Asset Management, Dhanvel Hybrid Seeds, Tempsens Instruments and Augmont Enterprises.

Shiprocket's allotment is scheduled for August 17 after its issue closed on August 14. Dhoot Transmission and Molbio Diagnostics are scheduled to list on August 17. No verified block or bulk deal was available in the reviewed material for the preceding session.