Sectoral Snapshot: IT Rebounds, But Metals, Oil Stocks Sink Even As Auto Flatlines

Mumbai, May 15:Indian equities ended lower on Friday as heavy selling in metal, oil-linked, PSU bank and realty stocks overshadowed a rebound in information technology shares, while a record low rupee and elevated crude oil prices kept investor sentiment fragile.

The benchmarks also snapped a two-day winning streak, with broader markets underperforming amid rising global macro concerns.

IT Rebound Not Enough

Despite the broader weakness, information technology shares provided some support to the indices. The Nifty IT index rose 1.3% after four consecutive sessions of losses triggered by concerns around AI-led disruption and slowing demand outlooks.

Infosys, Tata Consultancy Services, Tech Mahindra and HCL Technologies rose.The IT index’s gains of 1.3% todaydidlittle to either help the benchmark indices or erase the overalldecline of 5.7% seen by IT stocks over the week as OpenAI’s launch of a new AI venture, backed by a $4 billioninvestment, sparkedfearsofrevenue disruption.

It is to be noted that media and FMCG stocks also closed in positive territory, again helping very little.

Metals Melt After Party

Metal stocks emerged as the worst-hit pocket of the market, dragging the Nifty Metal index down nearly 2% after the sector’s recent rally. Profit booking, slide in silver prices as well as concerns aboutpossible rate hikes in the U.S. weakening global industrial demand also weighed on sentiment.

Shares of Vedanta and Hindustan Zinc declined sharply after silver prices corrected from recent highs. Hindustan Copper and National Aluminium Company also fell. The sector had rallied earlier in the week after India raised import duties on gold and silver to 15% from 6%, boosting sentiment around silver-linked companies. Hindustan Zinc is the biggest silver producer in India. The latest correction also cameafter a rally in metals.For example, yesterday, SAIL had gone down after a blistering 14% rally the day before caused by a short squeeze — where aggressive bearish bets are forced to close out as prices rise against them, creating a feedback loop of additional buying. Today it is down again over 3%.

Adani Enterprises emerged as the outlier on the index paring gains to trade at the flatline, as optimism over reports that U.S. authorities were moving closer to dropping criminal fraud charges against billionaire chairman Gautam Adani helped the stock counter negativity from peers on the index.

Oil & Gas Under Pressure

Oil-linked shares also remained weak as Brent crude traded above $106 per barrel amid tensions surrounding the Strait of Hormuz and fears of prolonged supply disruptions.

The Nifty Oil & Gas index fell 1.67%, with oil marketing companies witnessing broad-based selling despite the government raising petrol and diesel prices by Rs 3 per litre. Investors remained concerned that elevated crude prices could continue to hurt margins and increase subsidy-related pressure on refiners.

Shares of Bharat Petroleum, Hindustan Petroleum and Indian Oil Corporation were among the key laggards within the sector.

PSU Banks, Realty Extend Declines

PSU bank and realty counters also saw sharp declines as risk appetite weakened across the broader market. The Nifty PSU Bank index dropped 1.8%, while the Realty index fell 1.79%.

Midcap and smallcap stocks underperformed the benchmarks, with the broader market reflecting increasing investor caution amid volatile global conditions. India VIX rose nearly 1%, signalling elevated market volatility.

Auto Flatlines

Nifty Auto ended near the flatline, failing to rise or rescue the markets. However, Tata Motors Passenger Vehicles did see to it that the index reached the flatline instead of recording a decline as the stock surged over five per cent on optimism over launches, cost-cutting measures and strong volume guidance, despite a profit drop.

Rupee Rollercoaster Adds to Concerns

Currency weakness remained another major concern for investors. The rupee slipped past the 96-per-dollar mark for the first time, pressured by rising oil prices, a stronger dollar and persistent foreign fund outflows.

Analysts said rising U.S. Treasury yields and expectations of further Federal Reserve tightening have intensified pressure on emerging market assets, including Indian equities and the rupee.

Stock-Specific Moves

Among individual names, Tata Motors emerged as the top Nifty gainer despite reporting a drop in quarterly profit, as investors focused on expectations of new launches and cost-cutting measures.

Adani Enterprises and other Adani Group companies remained in focus after reports that U.S. authorities were moving closer to dropping criminal fraud charges against Gautam Adani.

Meanwhile, Vodafone Idea remained one of the most actively traded stocks ahead of its board meeting to discuss fundraising plans and quarterly earnings.

Markets are likely to remain volatile in the near term as investors continue to monitor crude oil prices, global bond yields, currency movements and geopolitical developments in the Middle East.

Source:

• Exchanges