Autos, Defence Drive Markets All The Way ToThe Flatline Even As IT Drags

Mumbai, May 7: Indian markets witnessed sharp sectoral divergence on Thursday, with auto, defence and capital goods stocks leading gains while IT and PSU banking counters remained under pressure amid profit booking after the previous session’s rally.

The broader undertone of the market stayed positive despite benchmark indices ending nearly flat, with 11 out of 16 major sectoral indices closing in the green. Investor sentiment remained supported by falling crude oil prices and optimism surrounding a potential U.S.-Iran peace arrangement, which eased concerns around inflation and India’s import bill.

Autos Amaze

Auto stocks emerged as the biggest rockstars of the market today withthe Nifty Auto index rallying strongly, boosted by upbeat earnings, improving export sentiment and optimism around domestic demand recovery. Shares of Bajaj Auto climbed after the company reported stronger-than-expected quarterly earnings and announced a buyback, while Mahindra & Mahindra extended gains on continued optimism around its SUV and tractor businesses. Hero MotoCorp also roseon expectations of stronger EV and export growth.

Other Rockstars

Defence and capital goods stocks continued their recent momentum, supported by robust earnings, rising order books and optimism around government-led manufacturing and infrastructure spending. Investors remained focused on companies linked to domestic capex and localisation themes, which analysts expect to remain long-term structural growth drivers.

Running Ahead

Midcap and smallcap stocks once again outperformed the benchmarks, signalling continued risk appetite in broader markets. The Nifty Midcap 100 index gained about 1.1%, while the smallcap index rose nearly 0.9%, driven by buying in manufacturing, industrial and consumption-linked names.

Tech Tumble

IT stocks witnessed profit booking after recent gains. The Nifty IT index declined around 0.8%, dragged lower by weakness in large-cap software exporters amid concerns over global technology spending and cautious sentiment in overseas markets. Investors remained wary of export-oriented sectors due to uncertainty in global demand conditions.

Other Losers

PSU banking stocks also underperformed, with the sector index slipping around 0.5% as traders booked profits following Wednesday’s strong rally triggered by the government’s credit guarantee scheme announcement. The sector remains sensitive to interest rate expectations and broader macroeconomic developments.

FMCG stocks traded showed weakness with their index declining 0.76% as investors weighed concerns around input costs and margin pressures. Consumer-facing sectors remained relatively subdued compared with high-beta cyclical pockets such as autos and industrials.

Among individual movers, Paytm parent One97 Communications surged after reporting a quarterly profit, reinforcing improving sentiment around new-age technology companies. On the other hand, Godrej Consumer Products declined despite reporting earnings growth, as investors flagged concerns over profitability and cost pressures.

Analysts said the market is currently witnessing a clear rotation towards domestic cyclical sectors such as auto, defence and industrials, while export-oriented segments like IT remain vulnerable to global uncertainty. Falling crude oil prices and easing geopolitical tensions are also expected to keep supporting sectors linked to consumption and infrastructure in the near term.

Source:

• https://www.nseindia.com/market-data/live-market-indices