Sectoral Watch: IT, Auto Outperform as Financials Drag Amid RBI Proposal 

Mumbai, August 7: Sectoral performance on Dalal Street remained sharply divided on Friday, with information technology and automobile stocks leading gains, while financials came under heavy selling pressure after the Reserve Bank of India (RBI) proposed tighter norms for revolving credit products offered by non-bank lenders. 

Financials Sink as Bajaj Twins Tumble 

Financial stocks emerged as the biggest drag on the benchmark indices. The Nifty Private Bank index fell 1%, while the Nifty Financial Services index ended 1.5% lower. 

Bajaj Finance slumped 6% after the RBI’s draft regulations raised concerns over the growth outlook for NBFCs. Bajaj Finserv declined 3.7%, while ICICI Bank also finished among the key losers, weighing heavily on both the Sensex and Nifty. 

The proposed regulatory changes triggered broad-based selling across lending and financial services stocks as investors assessed the potential impact on credit growth and profitability. 

IT Stocks Shine 

The Nifty IT index climbed 1.42%, making it one of the best-performing sectors of the day as investors sought refuge in export-oriented technology companies amid global uncertainty. 

Heavyweight TCS surged over 3%, while other frontline IT stocks also attracted buying interest. The sector benefited from its defensive appeal ahead of the U.S. non-farm payrolls report, which could influence expectations for Federal Reserve interest-rate cuts. 

Auto Advances 

Automobile stocks also outperformed the broader market, with the Nifty Auto index rising 1.8%. 

Hero MotoCorp climbed around 3% after reporting a strong increase in June-quarter profit, helping lift sentiment across the sector. Auto components maker Samvardhana Motherson International jumped nearly 9% after a sharp rise in June-quarter earnings, prompting favourable view from a broker.  

Investors favoured auto stocks on expectations of resilient domestic demand and healthy earnings momentum. 

Metals Gain on Hindalco Earnings 

Metal stocks witnessed selective buying as Hindalco Industries reported a 75% jump in June-quarter profit on the back of higher aluminium prices. 

Hindalco shares gained 3.2%, making it one of the top Nifty performers. Hindustan Zinc was also one the few notable gainers on the Nifty Metal index, rising 2.2%. 

Consumer Stocks Mixed Despite Britannia’s Rally 

The FMCG pack traded mixed as investors digested the latest earnings. 

Britannia Industries rose about 2% after reporting profit growth and issuing an upbeat outlook despite input cost pressures. However, gains in the biscuits maker were offset by weakness in other consumer names, limiting the sector’s overall performance. Godrej Consumer Products, for example, fell 2.5% despite a rise in profit. 

Earnings Continue to Drive Stock-Specific Moves 

Corporate earnings remained the primary catalyst for individual stocks. 

With the earnings season entering a crucial phase, analysts expect stock-specific action to remain elevated even as broader market sentiment continues to be influenced by global cues, crude oil prices and foreign institutional investor flows. 

Source

• NSE