Stocks in Focus: IT & Pharma Stocks Swim Against the Tide as PSU Banks & Consumer Durables Bleed

Mumbai, May 18: A study of Monday’s sectoral performance on the NSE reveals a sharply polarised market, with the technology and healthcare space holding their ground while rate-sensitive, discretionary, and geopolitically exposed sectors bear the brunt of the Iran war-driven selloff.

Three Sectors Doing Well

Nifty IT (+1.77%) is the standout gainer of the session by a wide margin, driven by a flight to defensive, export-oriented businesses that earn in dollars. With the rupee hitting record lows against the greenback, IT companies benefit directly — every rupee of depreciation expands their rupee-denominated revenues and margins without any corresponding rise in costs, making them a natural hedge in a currency crisis.

The broader Nifty Midsmall IT & Telecom index is also up 0.37%, and top stocks such as Tech Mahindra (+3.74%), Infosys (+1.59%), Wipro (+0.90%), HCL Technologies (+0.90%) and TCS (+0.62%) are all trading higher, confirming that the buying is broad-based within the sector and not limited to a single counter.

Nifty Pharma (+0.12%) and Nifty Healthcare Index (-0.20%) are holding up decisively better than the broader market, with the healthcare complex acting as a classic defensive safe haven when macro uncertainty spikes. Pharmaceutical companies derive a large share of revenues from US and European exports, giving them the same rupee-depreciation tailwind as IT firms, while domestic-facing healthcare demand is largely inelastic and insulated from crude oil price shocks or geopolitical disruption.

Sun Pharma (+0.87%) and Cipla (+0.24%) are among the Nifty gainers today, reflecting selective institutional buying in quality large-cap pharma names as investors rotate away from cyclical sectors.

Nifty FMCG (-0.87%) is outperforming significantly relative to most other sectors and is one of the more resilient non-IT indices on the day. FMCG companies sell essential everyday goods whose demand holds up regardless of market conditions, and while rising crude prices do lift input costs for packaging and logistics, the sector’s defensive earnings profile and dividend-paying characteristics make it a preferred destination for investors seeking to reduce risk exposure during periods of heightened geopolitical volatility.

Two Sectors Doing Badly

Nifty Consumer Durables (-2.78%) is the single worst-performing sectoral index on Monday, and the reasons are layered. The sector sells big-ticket, discretionary products air conditioners, televisions, appliances that consumers defer when economic uncertainty rises and household confidence weakens.

A surging oil price translates directly into higher raw material and logistics costs for these manufacturers, while a falling rupee raises the cost of imported components. The combination of demand anxiety, margin pressure, and a risk-off market environment is hammering the sector’s valuations, with the index having already shed over 8% in the past month alone.

Nifty PSU Bank (-2.45%) is the second-worst performer among key sectoral indices, under assault from multiple directions simultaneously. State-owned banks carry heavy exposure to infrastructure and energy sector loans, making them acutely sensitive to the macro deterioration triggered by elevated crude prices and a widening current account deficit.

The rupee’s record weakness raises the risk of foreign capital flight from Indian debt, which tightens systemic liquidity and pressures banks’ funding costs, while rising US Treasury yields reduce the attractiveness of Indian assets more broadly. State Bank of India, the bellwether PSU bank, has fallen 2.71% today to Rs 937.10 from its previous close of Rs 963.20, epitomising the sector’s distress.

Source:

• https://www.nseindia.com/market-data/top-gainers-losers
• https://www.nseindia.com/market-data/live-market-indices