Financials Drag Markets Along With IT Even As Autos Lend Support

Mumbai, July 21: Indian benchmark indices ended lower on Tuesday, with the Sensex falling 238 points and the Nifty slipping below the 24,200 mark, as elevated crude oil prices, foreign fund outflows and weakness in heavyweight HDFC Bank weighed on sentiment. The Sensex closed 238.41 points, or 0.31%, lower at 77,470.11, while the Nifty 50 declined 50.80 points, or 0.21%, to settle at 24,187.70. Market breadth was relatively balanced, with 2,087 shares advancing against 1,942 declining, while 180 stocks remained unchanged. 

Financial Stocks Drag 

Financial stocks remained under pressure after HDFC Bank extended its decline for a second session. Shares of HDFC Bank fell 2%, adding to the 5.1% slide recorded in the previous session after investors reacted negatively to pressure on the lender’s June-quarter net interest margins. 

The stock’s decline weighed disproportionately on the benchmark indices given its heavy weightage. The weakness in private-sector banks also kept financial stocks under pressure, with investors assessing the outlook for margins and credit growth amid a changing interest-rate environment. Nifty Financial Services declined 0.16%. Nifty PSU Bank index also went down 0.9% with Bank of Baroda leading the fall with a 2.8% decline. State Bank of India also fell 1.5%. 

IT Declines 

Information technology stocks also contributed to the market decline, with Tata Consultancy Services and Infosys falling around 1% each. The sector remained subdued as investors continued to assess global technology spending and the outlook for demand amid a busy earnings season. HCL Technologies jumped 1.5% after chairperson Roshni Nadar Malhotra said the company sees AI as a key growth driver and an opportunity to accelerate business momentum. 

Pharma index managed to post gains despite some stocks recording declines. Cipla declined 0.6% while Dr Reddy’s Laboratories went down 1.4%. Healthcare index also ended in the green despite Max Healthcare Institute  dipping. 

Auto Stocks Support 

Auto stocks rose with TVS Motor Company leading the rise with a surge of over 5% after results. The firm reported 51% year on year jump in net profit for the quarter ended June. Standalone revenue from operations rose 38%. TVS Motor said rising commodity prices amid global market uncertainty pushed up input costs during the quarter. The company partly offset the impact through price hikes and cost-saving measures, including efficiencies achieved from higher scale, it said in a stock exchange filing.  

Bajaj Auto, however, declined 1.13% after posting a sharp 42.3% jump in June-quarter profit on Tuesday, buoyed by healthy sales across India and overseas markets. 

The broader auto sector has benefited from a pickup in domestic demand following the government’s September reduction in goods and services taxes. However, the recovery has been accompanied by mounting cost pressures, as higher commodity, energy and logistics expenses, exacerbated by disruptions stemming from the U.S.-Iran conflict that erupted in February, squeezed automakers. 

Oil & Gas Stocks Weighed Down By Oil 

Oil and gas index declined 0.5% as Brent crude hovered around $90 a barrel amid continuing uncertainty in the Middle East. 

Reliance Industries declined 1.5%, extending losses for a second consecutive session after the heavyweight stock had rallied in the run-up to its June-quarter results. The fall in Reliance added to the pressure on the benchmark indices. 

For India, sustained elevated crude prices remain a risk to inflation, the trade deficit and the rupee, while potentially increasing input costs for several industries. Investors continued to monitor developments surrounding the Middle East, including reports of US-Iran mediation alongside fresh attacks and threats involving shipping routes. 

Cement, Asset Management Stocks Buck Trend 

UltraTech Cement rose 1.5% extending gains from the previous session after the country’s largest cement maker reported a strong quarterly profit. The positive earnings performance supported buying interest in the stock. 

SBI Funds Management also stood out, ending 6.2% higher on its stock market debut. The asset manager had listed at a premium following its $1.03 billion IPO last week, with investor demand supporting its first trading session. 

Mid-, Small-Caps Outperform 

The broader market held up better than the headline indices, with the Nifty Smallcap 100 and Nifty Midcap 100 gaining 0.5% and 0.3%, respectively. Eight of the 16 major sectoral indices ended lower, pointing to a mixed trading session in which stock-specific and earnings-related moves remained prominent. 

FII Selling Adds To Pressure 

Foreign portfolio investors sold Indian equities worth ₹1,121 crore on Monday, while domestic institutional investors remained net buyers, purchasing shares worth ₹1,312 crore, according to provisional NSE data. 

Overall, investors remained cautious as elevated crude prices, geopolitical uncertainty and foreign fund outflows offset optimism from selective corporate earnings. With the earnings season gathering pace, stock-specific results are likely to remain a key driver of market direction, while movements in crude oil prices, developments in the Middle East and institutional fund flows will continue to influence broader sentiment. 

Source

• NSE