IT Soars as Infosys, Tech Mahindra Rally; Realty, Metals Lead Sectoral Losers

Mumbai, July 7: Sectoral indices ended on a mixed note on Tuesday, with information technology stocks staging a strong rally ahead of the June-quarter earnings season, while realty, metal and energy shares witnessed broad-based profit booking as benchmark indices snapped a four-day winning streak.
The Nifty IT index emerged as the best-performing sector, surging 2.4%, while the Nifty Realty index topped the losers’ chart with a 1.5% decline. Most sectoral indices ended in the red as investors turned increasingly stock-specific following a string of June-quarter business updates.

The benchmark Sensex and Nifty 50 ended marginally lower after surrendering intraday gains, with late-session selling weighing on market sentiment.

IT stocks steal the spotlight

Technology stocks led, with heavyweight exporters gaining ahead of TCS kicking off earnings later this week on Thursday. Infosys, Tech Mahindra and HCL Technologies were among the biggest gainers on the Nifty, helping the Nifty IT index outperform every other sector by a wide margin.

The rally comes even as analysts expect large IT companies to deliver subdued earnings. Perhaps expectations that the US central bank won’t be raising rates later this year boosted sentiment today.
Consumer durables supported by Titan

The Nifty Consumer Durables index was also one of the few major sectors to finish in positive territory, gaining 0.9%.

The gains were led by Titan Company, whose shares advanced after the jewellery and lifestyle retailer reported a robust June-quarter business update. The Tata Group company posted 41% growth in its consumer business during the quarter, driven by healthy jewellery demand despite elevated gold prices.
Strong buying in Titan helped offset weakness in several other consumption-linked names such as Dixon Technologies (India) and Kalyan Jewellers India.

Kalyan Jewellers India slid 7% despite reporting a strong June-quarter business update. The jewellery retailer posted around 38% year-on-year growth in consolidated revenue, driven by robust demand in its domestic business and continued momentum across its international operations.

Realty, metals witness fall

On the flip side, the Nifty Realty index fell 1.5%, making it the day’s worst-performing sector as investors booked profits after yesterday’s rally.

The Nifty Metal index declined 1% as constituent Adani Enterprises declined over 3%, while the Nifty Energy, Nifty Pharma and Nifty Media indices each slipped around 0.7%.

Energy stocks remained under pressure after heavyweight Reliance Industries declined 1% after advancing over two sessions, while weakness in select commodity-linked shares weighed on the metal pack.

The selling pressure was not confined to large-cap stocks. The Nifty Midcap 100 index fell 0.4%, while the Nifty Smallcap 100 index declined 0.55%, indicating broad-based weakness across the broader market.

Defence sees profit booking

Defence stocks came under pressure on Tuesday as investors booked profits following Monday’s rally, which was sparked by the Defence Acquisition Council’s (DAC) approval of capital acquisition proposals worth around ₹52,000 crore. The approved procurements include air defence systems, anti-drone technologies, surveillance equipment and unmanned warfare platforms aimed at strengthening the operational capabilities of the Army, Navy and Air Force.

Paras Defence, Data Patterns, and Bharat Electronics (BEL) — all fell, besides others. The Nifty defence index fell 1.6%.

Earnings season to drive sector rotation

With the June-quarter earnings season kicking off this week, analysts expect sectoral leadership to remain fluid as investors react to company-specific earnings and management commentary.

Foreign institutional investors have remained net buyers in recent sessions, while easing crude oil prices continue to support India’s macroeconomic outlook. However, elevated valuations in several sectors mean investors are becoming increasingly selective, rewarding companies that deliver strong operational performance while punishing those that miss expectations.

Market participants believe the next few weeks could see sharper sector rotation as earnings announcements from IT, banking, consumer and industrial companies provide fresh cues on corporate India’s growth trajectory.

Source: NSE