Sectoral View: IT Rallies On TCS Optimism; Metals, FMCG Drag as Crude Concerns Linger

Mumbai, July 13: Sectoral performance on Dalal Street remained sharply divided on Monday, with information technology stocks powering the market’s recovery from early losses, while metals, FMCG and infrastructure counters came under pressure amid concerns over elevated crude oil prices and slowing global growth. 

The Nifty IT index emerged as the top-performing sector, surging 3.6 per cent to a one-month high, while Nifty Media climbed 2 per cent and Nifty Consumer Durables gained 1 per cent. On the flip side, Nifty FMCG fell 1 per cent to become the worst-performing index, followed by Nifty Metal, down 0.7 per cent, and Nifty Infrastructure, which slipped 0.5 per cent. 

IT steals the spotlight on TCS-led rally 

Technology stocks drove the day’s recovery after Tata Consultancy Services (TCS) delivered an upbeat set of quarterly numbers last week, announced a multi-million-dollar contract with ABB and unveiled a leadership restructuring aimed at strengthening its business verticals.

Nifty IT soared into the skies on multiple wings. Source: NSE 

TCS surged 5.4 per cent to emerge as the top gainer on the Nifty50, lifting sentiment across the sector. HCLTech advanced 4.9 per cent ahead of its June-quarter earnings announcement later in the day, while Tech Mahindra, Infosys and LTIMindtree also posted healthy gains. 

LTIMindtree rose 2.2 per cent after announcing a strategic partnership with Anthropic to accelerate enterprise adoption of Claude AI models, adding to optimism surrounding artificial intelligence-led spending. 

Apart from company-specific developments, investors also accumulated export-oriented software stocks as a relatively weaker rupee improves earnings prospects for IT companies with large overseas revenue exposure. 

Metals lose shine as global growth concerns weigh 

Metal stocks remained among the biggest laggards, with investors trimming exposure amid concerns over slowing industrial demand and uncertainty surrounding global commodity prices. 

The Nifty Metal index fell 0.7 per cent, with Tata Steel emerging among the top drags on the benchmark indices. Vedanta, JSW Steel, and NMDC also traded lower as sentiment remained subdued across the sector. 

Rising geopolitical tensions and higher crude prices further clouded the outlook for industrial commodities. 

FMCG under pressure despite defensive appeal 

Consumer goods stocks witnessed broad-based selling, making Nifty FMCG the day’s weakest-performing sector. 

Nifty FMCG declined 1% failing to live up to its defensive reputation as investors rotated out of the index. Source: NSE 

Nestle India featured among the top losers on the Nifty50, while other heavyweight names such as Hindustan Unilever, Dabur India and Tata Consumer Products also traded with a negative bias. Varun Beverages fell more than others, declining 1.9%.

Analysts attributed the weakness largely to investors rotating into technology shares following encouraging updates. 

Infrastructure, aviation stocks remain weak 

Infrastructure stocks also ended in the red, dragging the Nifty Infra index lower by 0.5 per cent. 

Grasim Industries emerged as the biggest loser on the Nifty50, declining around 2 per cent, while Larsen & Toubro and other capital goods names witnessed mild selling pressure. Grasim fell despite brokers retaining their buy rating, citing strong growth prospects in its Viscose Staple Fibre (VSF) business, a resilient chemicals segment, the rapid scale-up of its paints venture and other growth drivers. 

Aviation shares remained under pressure as elevated crude oil prices continued to raise concerns over higher fuel costs. InterGlobe Aviation (IndiGo) was among the benchmark’s major losers during the session. 

Autos, media buck the trend 

The automobile sector managed to end in positive territory despite volatile market conditions. 

The Nifty Auto index gained 0.45 per cent, supported by a strong rally in Bajaj Auto, which finished among the top gainers on the benchmark. Mahindra & Mahindra and TVS Motor Company also traded with modest gains, helping offset weakness in select passenger vehicle makers. 

Media stocks extended their recent momentum, with the Nifty Media index rising 2 per cent. Select broadcasting and entertainment companies attracted buying interest as investors looked beyond the benchmark heavyweights. Zee Entertainment Enterprises and Saregama India both rose 4% each. 

Financials remain mixed; broader markets subdued 

Banking stocks delivered a mixed performance. The Nifty Private Bank index edged up 0.3 per cent, supported by selective buying in ICICI Bank and Kotak Mahindra Bank, although gains remained capped by cautious sentiment ahead of more quarterly earnings. Nifty PSU Bank index was up 0.1%. 

The broader market was relatively subdued despite positive market breadth. Both the Nifty Midcap and Nifty Smallcap indices ended largely flat, indicating that investors preferred large-cap names, particularly technology stocks, over broader market plays. 

With the June-quarter earnings season gathering pace, analysts expect stock-specific action to dominate in the coming sessions. Movements in crude oil prices, geopolitical developments in the Middle East and upcoming corporate earnings are likely to remain the key triggers for sectoral rotation. 

Source

•  NSE