Sectoral Snapshot: IT Stocks Shine While Pharma, Power Lag as Nifty Snaps Losing Streak

Mumbai, June 2:Information technology stocks emerged as the clear winners on Dalal Street on Tuesday, helping benchmark indices recover from early losses and snap a four-session losing streak despite lingering concerns over the Iran war, elevated crude oil prices and persistent foreign investor outflows.

It Leads the Rebound

The Nifty IT index surged 4.2%, making it the top-performing sector by a wide margin. Heavyweights Infosys, Tata Consultancy Services (TCS), HCL Technologies and Tech Mahindra led the advance as investors continued to bet on growing artificial intelligence-related spending and improving sentiment toward global software companies. The sector has now gained roughly 7% over the last two sessions.

Infosys share price rose 5.7% to settle at Rs 1,270.8 while Tata Consultancy Services share price advanced 6.5% to close at Rs 2,447. Tech Mahindra also rose 1.8% to settle at Rs 1,571.4.

Nifty IT gave the broader indices their wings, helping them rise above volatility. Source: NSE

The rally in technology stocks came despite concerns earlier this year that AI could disrupt traditional outsourcing models. Investors are increasingly focusing on opportunities arising from AI adoption, cloud migration and digital transformation projects.

PSU Banks, FMCG, Autos and Metals Join Gains

Nifty FMCG index attracted interest and contributed to the overall rise of the benchmark Nifty. Source: NSE 

Buying was also visible in several domestic-facing sectors. PSU bank stocks advanced, reflecting improving sentiment toward state-run lenders after a strong March-quarter earnings season. FMCGs also advanced with PepsiCo bottler Varun Beverages share price leading their rise by jumping 2.2% to settle at Rs 537. Diversified conglomerate ITC share price also rose on the index, increasing over 1% to close at Rs 283. Dabur edged up today after falling yesterday with the FMCG major saying it is engaging with US authorities over observations at Silvassa unit.

Auto and metal counters also edged higher, while consumer durables and realty stocks attracted selective buying. Autos in particular were inspired by car sales data for May showing resilience in the face of headwinds from Iran and oil.

Nifty Auto revved up as car sales showed resilience in May despite headwinds. Source: NSE

The broader market participated in the recovery, with midcap and smallcap indices ending in positive territory, suggesting investors were willing to add risk despite geopolitical uncertainty.

Pharma and Healthcare Under Pressure

Pharmaceutical and healthcare stocks bucked the broader market trend. Dr. Reddy’s Laboratories was among the top laggards on the Nifty, dragging the pharma index lower. Healthcare shares remained under pressure as investors rotated into higher-beta sectors such as technology and metals.

The weakness also comes against a backdrop of challenges facing parts of the pharmaceutical sector, including pressure in the U.S. generics market and slower earnings momentum.

Power Stocks Retreat

Power shares also underperformed, with NTPC and Power Grid Corporation of India featuring among the top losers on the benchmark index. State-run hydropower producer NHPC fell sharply after the government launched an offer for sale at an 8% discount to the previous closing price.

Financials Remain Mixed

Financial stocks were relatively subdued compared with the broader market. Financials slipped about 0.6% during the session, limiting the benchmark’s gains. Foreign investor selling remained a key overhang for the sector, with overseas investors continuing their record exodus from Indian equities.

While IT stocks provided the spark for Tuesday’s rebound, investors remain focused on crude oil prices, developments in the Middle East and the Reserve Bank of India’s policy decision later this week for further market direction.

Source:

• NSE