Indian Equities Poised for Gains on TCS Beat Amid Middle East Volatility

Indian equity markets are anticipated to trend higher on Friday, buoyed by a positive earnings surprise from Tata Consultancy Services (TCS) and a rally in US indices. This optimism comes despite a backdrop of intensifying geopolitical friction in the Middle East that threatens global stability. The fragile ceasefire between the U.S. and Iran is under significant strain following fresh Israeli strikes on Lebanon. While Prime Minister Benjamin Netanyahu expressed readiness for direct negotiations with Lebanon, the IDF has warned of potential rocket attack expansions by Hezbollah, raising the specter of a broader regional conflict. Energy markets are reacting sharply to the instability, with Brent crude futures maintaining levels above $96 per barrel. Maritime tracking data underscores the severity of the situation, indicating that only 10 vessels have passed through the Strait of Hormuz since the ceasefire took effect, fueling inflationary concerns and tightening global energy supplies. On the domestic front, the Sensex and Nifty fell 1.2% and 0.9% respectively on Thursday. The Indian rupee closed at 92.6575 against the dollar, reflecting continued foreign institutional investor (FII) selling of Rs. 1,711 crore, which was partially offset by domestic institutional investor (DII) purchases of Rs. 956 crore. In the U.S., markets ended higher with the S&P 500 gaining 0.6% and the Nasdaq rising 0.8%. However, economic data presented a mixed picture, with Q4 GDP growth revised lower to 0.5% and a rebound in jobless claims to their highest level since February.