Sectoral Snapshot Today: Private Banks, IT, FMCG Stocks Drag; PSU Banks Rally

Mumbai, October 19: Banking, information technology and fast-moving consumer goods (FMCG) stocks led losses in the Indian equity market on Monday, while public sector banks bucked the broader weakness after strong quarterly earnings lifted investor sentiment. The Nifty Private Bank index fell 1.8%, the IT index declined 1.3% and the FMCG index shed 1.4%, while the Nifty PSU Bank index gained 2.5%.

The sell-off in private lenders came as investors assessed September-quarter earnings from major banks and booked profits after last week’s sharp rally. The Sensex plunged 876.37 points, or 1.17%, to close at 73,852.90, while the Nifty 50 fell 257.20 points, or 1.11%, to settle at 22,888.95.

Private Banks under Pressure

The Nifty Private Bank index was among the biggest sectoral laggards. Axis Bank plunged 4.2% after its September-quarter profit narrowly missed analysts’ estimates, as higher operating expenses and weaker other income offset robust credit growth and lower provisions.

ICICI Bank declined 1.15% despite reporting a better-than-expected quarterly profit, supported by loan growth and lower provisions for bad loans. The weakness in private lenders also came amid profit-taking after last week’s rally.

IT stocks give back some gains

The Nifty IT index dropped 1.3%, retreating after gaining 3.9% in the previous session. LTIMindtree fell 2.8% after its September-quarter profit missed analysts’ estimates, although revenue growth was supported by its consumer and technology businesses.

Infosys was also among the major Nifty 50 losers, declining 2.6% and adding to the pressure on the technology pack. The Nifty IT index had gained 11.7% last week, marking its strongest weekly performance since October 2008, as investors returned to the sector following sustained pressure over concerns about artificial intelligence-driven disruption to traditional outsourcing businesses. A selloff in global AI-linked stocks had also helped improve sentiment towards Indian IT companies.

PSU banks outperform

The Nifty PSU Bank index was the only major sectoral index to finish in positive territory, gaining 2.5% as investors responded to earnings and asset-quality improvements among state-run lenders.

Punjab National Bank surged 4.8% after reporting a 13% year-on-year rise in September-quarter net profit to Rs 5,532 crore. Net interest income increased 11% to Rs 11,601 crore, while the gross non-performing asset ratio improved by 90 basis points to 2.55%.

Union Bank of India jumped 5.3% after reporting higher quarterly profit and an improvement in asset quality. State Bank of India was also among the Nifty gainers, rising 1.15%.

FMCG, cement stocks decline

The Nifty FMCG index fell 1.4%, extending the market-wide decline beyond banking and technology stocks. UltraTech Cement dropped 2.4% after the country’s largest cement producer by capacity reported September-quarter profit below analysts’ estimates.

The broader market also weakened, with the Nifty Midcap index falling around 1.1% and the Smallcap index declining 1%. Overall, 2,925 stocks declined on the NSE, compared with 1,163 advances and 181 unchanged stocks.

Elevated crude oil prices remained another concern for investors, given the potential implications for India’s import bill and inflation. Brent crude traded around $108.5 a barrel despite expectations that a US waiver of certain Russia-related sanctions could allow additional fuel supplies into the market.

Investors will now focus on upcoming quarterly earnings and the Jio Platforms IPO, which opens for subscription on Wednesday. Indian equity markets will remain closed on Tuesday for a holiday.

Source:

• NSE