ICICI, HDFC Bank and Other Private Lenders Rescue Markets as Sun Pharma Drags After Results

Mumbai, May 22:Indian benchmark indices ended higher on Friday after a choppy trading session, with gains in financial stocks helping offset weakness in pharma and healthcare counters as investors remained cautious over elevated crude oil prices and uncertainty surrounding U.S.-Iran negotiations.

The Sensex and Nifty recovered from early volatility to close modestly higher, aided by strong buying in heavyweight private banks and select earnings-driven stocks. The rupee’s rebound from record lows also improved sentiment after aggressive intervention by the Reserve Bank of India helped ease concerns around currency volatility.

At the closing bell, the Nifty 50 settled above the 23,700 mark, while the Sensex ended with gains of over 200 points after trimming sharper intraday advances.

Financials Lead the Rescue

Financial stocks emerged as the biggest support for the market, with private banking heavyweights leading the charge. To be sure, the private bank index climbed 1.5%, the most on the markets, as marketsfelt large private banks can brave inflationary pressures. Shares of HDFC Bank and ICICI Bank rose strongly. HDFC Bank rose 1% to close at Rs 766.80 while ICICI saw an increase of 1.7%, settling at Rs 1,264.

Axis Bank Rose the Most, Up 2.6% at Rs 1,285.

The rebound in banks came as investors rotated into large-cap financials after recent weakness linked to global risk-off sentiment and foreign fund outflows. Banking stocks also benefited from easing fears of uncontrolled rupee depreciation following RBI intervention in currency markets.

However, PSU banks witnessed mixed action. Central Bank of India declined sharply after the government announced an offer for sale to divest up to an 8% stake in the lender, raising concerns over near-term supply pressure.

Pharma, Healthcare Stocks Weigh on Sentiment

While financials supported the benchmarks, pharma and healthcare stocks emerged as the biggest drags on the market, with both sectoral indices declining more than 1%.

The weakness came despite continued optimism among brokerages over the sector’s long-term growth prospects. Bernstein recently initiated coverage on several pharma companies, citing structural tailwinds for Indian healthcare, while market experts continued to favour large-cap names such as Sun Pharmaceutical Industries and Aurobindo Pharma. India’s top drugmaker by revenue Sun Pharmaceutical Industries exceeded profit estimates ‌on Friday as speciality drugs boosted bottomline. Revenue too beat estimates rising nearly 13% but the stock got a fair beating on the markets declining 2.5% at Rs 1,844.60.

Aurobindo showed a decline of five per cent at Rs 1,463 while Glenmark fell the most, going down 5.6% to settle at Rs 2,259.

Analysts attributed Friday’s decline to profit booking as well after recent outperformance in defensive healthcare names during periods of market volatility.

Earnings-Driven Stock Action Continues

Stock-specific activity remained elevated amid the ongoing March-quarter earnings season. Shares of Life Insurance Corporation of India advanced after the insurer reported improved profitability in its group business segment, while Honasa Consumer rallied sharply on strong growth in its Mamaearth portfolio.

Telecom stocks also remained in focus, with Vodafone Idea extending gains and remaining the most actively traded stock on the NSE for the eighth straight session as investors tracked its fundraising efforts and 5G rollout plans.

Meanwhile, Ola Electric recovered modestly after a steep post-results selloff, though concerns around slowing demand, competitive pressure and weak revenue visibility continued to weigh on investor sentiment.

Source:

• NSE