IT Rebounds Sharply; Auto, Metal, Realty Gain While PSU Banks Lag

Mumbai, July 2: Information technology stocks staged a sharp comeback on Thursday, with the Nifty IT index soaring nearly 5% to snap a four-session losing streak as investors returned to beaten-down large-cap names. 

Infosys (up 5.6%) emerged as the top gainer on the Nifty 50, while Tata Consultancy Services (4.3%), Tech Mahindra (4.3%) and HCL Technologies (4.2%) also posted strong gains. The rally followed recent selling pressure in the sector, with investors taking advantage of attractive valuations amid improving global risk sentiment. IT stocks had also come under heavy selling pressure earlier this year amid concerns that rapid advances in AI could disrupt the sector’s traditional business model. Investor sentiment also improved after Federal Reserve Chair Kevin Warsh said inflation expectations had declined over the past four weeks, reinforcing hopes that price pressures may be moderating. 

Nifty IT finally flew after four days of slide. Source: NSE 

Lower crude oil prices and signs of progress in U.S.-Iran talks also boosted appetite for export-oriented technology stocks by easing concerns over inflation and the global economic outlook. 

Auto stocks advance as oil prices ease 

Auto shares ended higher as softer crude oil prices raised hopes of lower raw material and logistics costs for manufacturers. 

Nifty Auto advanced as stocks revved up on easier oil. Source: NSE

Mahindra & Mahindra (up 1.4%), Hero MotoCorp (0.7%), and TVS Motor Company (3.8%) were among the notable gainers. Lower fuel prices are also seen supporting vehicle demand by improving consumer affordability. To be sure, the country’s largest two-wheeler maker Hero MotoCorp rose after announcing an investment of more than Rs 3,200 crore in Andhra Pradesh in a bid to expand its manufacturing, logistics and electric mobility capabilities. 

However, Tata Motors Passenger Vehicles bucked the trend to finish among the top Nifty losers. Maruti Suzuki India also declined. 

Metal stocks gain; Vedanta demerged entities remain in focus 

Metal counters traded firmly higher, helped by continued buying in the recently listed Vedanta group companies and optimism surrounding commodity-linked stocks. 

Vedanta Iron & Steel remained locked in the upper circuit, extending its stellar post-listing rally. Vedanta Aluminium Metal rose 2.2%, again extending gains. Vedanta, which spun out the last two firms besides another two, inched up 0.2%. 

Among other risers in the sector, Tata Steel rose 1.3% while Hindalco Industries advanced 1%. 

Realty, consumer durables see buying 

The Nifty Realty and Consumer Durables indices each gained around 1% as investors accumulated interest-rate-sensitive sectors. 

Real estate developers gained amid hopes that stable borrowing costs and resilient housing demand would support sales, while consumer durable companies benefited from expectations of sustained discretionary spending. Titan Company and Kalyan Jewellers advanced 1.8% each as gold prices fell for a third day inspiring demand hopes for the jewellers. 

Capital goods under pressure, financials mixed 

Nifty Financial Services did not rise by much as Axis Bank and Kotak Mahindra Bank ended in the red. Source: NSE

Selling was visible in capital goods, power, telecom and PSU banking shares, making them the day’s weakest-performing sectors. 

Larsen & Toubro figured among the top losers on the Nifty, weighing on the capital goods index. In banking, PSU lenders traded lower. Select mid-sized banks gained after posting strong advances growth for the June quarter. Dhanlaxmi Bank rose 5%, while Jammu & Kashmir Bank added 5.4%, reflecting optimism over their lending momentum. 

Financial stocks witnessed a mixed session. Bajaj Finserv was among the top Nifty gainers, while Axis Bank ended in the red. 

While FMCG stocks advanced on the whole, one counter Nestle India featured among the benchmark’s biggest laggards as investors rotated into cyclical sectors such as IT, metals and auto. 

Source

• NSE