Private Lenders Rise as HDFC Bank Leads Charge, Auto Stocks Vroom On June Sales, IT And State Lenders Drag

Mumbai, July 6: Sectoral indices ended largely in the green on Monday, even as information technology and public sector banks lagged as investors positioned themselves ahead of the June-quarter earnings season.

The Nifty Realty index emerged as the top performer, climbing 1.8%, supported by optimism over easing interest rate expectations and improving monsoon conditions that could bolster housing demand. Consumer Durables advanced 1.5%, while the Auto index gained 1.4% as lower crude oil prices lifted sentiment around input costs.

The Oil & Gas index rose 1.1%, tracking a decline in global crude prices after OPEC+ agreed to increase production from August. Brent crude slipped below $72 a barrel, easing concerns over inflation and India’s import bill. The Metal index added 1%, while the Energy index gained 0.8%.

Private banks shine on business updates

Banking stocks remained in focus after several private lenders reported healthy June-quarter business updates over the weekend.

HDFC Bank surged 3.6% after posting a 15.4% year-on-year increase in gross advances and a 14.7% rise in deposits, emerging as the top contributor to the Nifty’s gains. IndusInd Bank, Bandhan Bank and Karur Vysya Bank climbed 3.6%, 3.4% and 4.2%, respectively, as investors welcomed their operational updates ahead of earnings season.

The Nifty Bank index rose 0.6%, though gains were capped by a nearly 4% decline in Kotak Mahindra Bank after its quarterly update disappointed investors. Axis Bank gave up early gains to end lower as investors booked profits after the lender’s June-quarter business update, which showed advances and deposits growing nearly 19% and over 18%, respectively.

The Nifty PSU Bank index fell 0.9%, extending losses for a third straight session as investors continued to favour private lenders with stronger deposit franchises despite robust credit growth at state-run banks.

IT under pressure ahead of earnings

The Nifty IT index declined 0.6%, making it one of the day’s weakest-performing sectors, as investors turned cautious ahead of the start of the June-quarter earnings season later this week.

Analysts expect a muted quarter for software exporters amid subdued client spending and AI-led pricing pressures, keeping sentiment toward the sector subdued. Tata Consultancy Services, which will be kicking off earnings on Thursday this week, went down 1.7%. Infosys was down 0.5%. Wipro declined 1%. HCL Technologies dipped 0.4%.

Broader markets outperform

Broader markets continued to outperform the benchmarks, with the Nifty Midcap 100 rising 0.4% and the Nifty Smallcap 100 gaining 0.7%, reflecting sustained appetite for domestic-facing stocks despite mixed global cues.

Auto stocks accelerate on robust June sales

The Nifty Auto index gained 1.4%, emerging as one of the day’s top-performing sectoral indices, as investors cheered strong June sales numbers across passenger vehicle and two-wheeler makers. Better-than-expected dispatches reinforced expectations of healthy demand recovery, aided by tax cuts, lower borrowing costs and improving rural sentiment.

Bajaj Auto led the gains, rising 2.6%, while Mahindra & Mahindra advanced 2% after reporting robust utility vehicle sales. Optimism was further boosted after brokerages cheered India’s electric vehicle penetration and reiterated their preference for Mahindra & Mahindra, Hyundai Motor India (up 0.5%), Ather Energy (down 0.4%) and Sona BLW Precision Forgings (up 1.1%) following the June sales data.
Brokerages remained constructive on the sector, citing broad-based growth across passenger vehicles, two-wheelers and commercial vehicles. Analysts also expect easing commodity costs and sustained domestic demand to support earnings momentum in the coming quarters.

Source: NSE