Infosys, TCS And Other Tech Stocks Ride To The Rescue As Metals Melt And Crude-linked Stocks Slide 

Mumbai, May 18:Equities witnessed sharp sectoral divergence on Monday as soaring crude oil prices and escalating geopolitical tensions in the Middle East triggered heavy selling across oil-sensitive sectors, while information technology stocks provided some stability to benchmark indices.

Benchmark indices swung sharply through the session after Brent crude surged above $111 per barrel following a drone attack on a UAE nuclear facility and continuing uncertainty around the US-Iran conflict. The rise in oil prices intensified concerns over imported inflation, pressure on the rupee and foreign fund outflows for oil-dependent India.

IT Stocks Cushion Markets

Information technology stocks emerged as the biggest support for the broader market as investors rotated into relatively defensive sectors amid fears of slowing global growth and rising energy prices. Market participants viewed large-cap IT companies as relatively insulated from immediate commodity-linked disruptions compared with cyclical sectors.

The move into IT also came as investors sought stability ahead of key earnings from major US technology companies later this week, particularly Nvidia, which remains central to the global artificial intelligence rally.

During the trade, Infosys added 2.4% at Rs 1,145.6 while TCS rose 1.1% to Rs 2,289.9. Tech Mahindra was up 4.8% and Wipro rose 1.3%.Another factor aiding their rise was a weakening rupee translating into more revenues for the tech giants which earn their bread in dollars.

Oil-Sensitive Sectors Under Pressure

The old and gas index declined as oil marketing companies witnessed heavy selling as rising crude prices raised fears of margin compression. Shares of BPCL, HPCL and Indian Oil Corporation remained under pressure declining up to 1.9% despite recent fuel price hikes, as investors worried that elevated crude costs could outweigh pricing benefits.

Aviation stocks also weakened sharply, with IndiGo down one per cent at Rs 4,275.70 as higher crude prices threaten to increase aviation turbine fuel costs, one of the largest expenses for airlines.

As for the consumer durables space, Amber Enterprises led the decline with the ac maker crashing 15% after warning of margin pressuresgoing ahead as investors chose to overlook the company reporting double-digit revenue and profit growth in the March quarter. Kalyan Jewellers also aided the decline in the space falling nearly two per cent.

Auto stocks too traded weak amid concerns that sustained inflationary pressure and higher fuel costs could impact demand recovery and consumer sentiment.

Metals, PSU Banks Drag

Metal counters emerged among the laggards as well withTata Steel leading their decline after reporting results that missed expectations, hurt by higher raw material costs and restructuring-related charges at its Netherlands operations.JPMorgan downgrading the stock over European operations also accelerated its decline on the bourses.

Adani Enterprises, which had emerged as the top gainer last week after announcing plans to set up a data centre with Uber and reports that the U.S. Justice Department is close to dropping criminal fraud charges against founder Gautam Adani, fell nearly one per cent today likely due to profit booking.

PSU banking stocks also remained under pressure as rising global bond yields and a weakening rupee heightened concerns around macroeconomic stability. Investors worried that elevated crude prices could worsen India’s fiscal and current account position, limiting room for policy support.

Pharma Edges Up

Pharmaceutical stocks witnessed selective buying interest, with Gland Pharma surging after reporting a near doubling of quarterly profit. Defensive sectors such as healthcare attracted investor attention amid the broader risk-off environment.

Source:

• NSE