Sectoral Watch: Metal, Auto Stocks Help Markets Inch Higher As Banks Drag After RBI Pause 

Mumbai, August 5: Indian markets witnessed a mixed sectoral performance on Wednesday, with metal and automobile stocks leading gains after the Reserve Bank of India (RBI) kept interest rates unchanged and retained its neutral policy stance. Investor sentiment was supported by the central bank’s decision to raise its FY27 growth forecast while lowering its inflation projection, although weakness in banking and media stocks capped the benchmarks’ gains. 

The Nifty Metal index emerged as the top-performing sector, climbing 1.7%, as improving global risk appetite lifted commodity-linked stocks. The rally came after Wall Street’s benchmark indices scaled record highs overnight and Asian markets advanced, encouraging investors to rotate into cyclical sectors. 

Metal Stocks Shine On Global Optimism 

Metal counters dominated the gainers’ list, with Hindalco Industries (up 1.96%), JSW Steel (up 2.31%), Tata Steel (1.07%), National Aluminium Company (1.06%), Hindustan Copper (8.42%), and Hindustan Zinc (6.05%)  attracting buying interest. 

The sector also benefited from easing concerns over global growth following upbeat corporate earnings from the United States, particularly in the technology sector, which reinforced expectations of resilient industrial demand. Lower crude oil prices also improved sentiment towards metal producers by easing input cost concerns. 

Among Nifty constituents, JSW Steel, Hindalco Industries and Tata Steel were among the day’s top gainers, helping offset weakness in other heavyweight sectors. 

Auto Stocks Gain 

The Nifty Auto index rose 1.3%, supported by gains across passenger vehicle and two-wheeler manufacturers. 

Tata Motors (up 0.8%), Mahindra & Mahindra (0.65%), Maruti Suzuki India (0.16%), Hero MotoCorp (2.56%), Eicher Motors (0.65%) and Bajaj Auto (1.72%) traded higher as investors remained optimistic about domestic demand after RBI commentary. 

Auto stocks also drew support from softer crude oil prices, which are viewed as positive for consumer sentiment and could help ease inflationary pressures over time. 

Banks Underperform Despite RBI Status Quo 

Banking stocks lagged the broader market even though the RBI delivered a widely expected policy decision. 

The Nifty Bank index declined 0.3%, weighed down by declines in private lenders. ICICI Bank and Axis Bank declined. Investors largely shrugged off the central bank’s decision to leave the repo rate unchanged at 5.25%, with the policy outcome already priced into the market. 

The RBI maintained its neutral stance and unanimously voted to keep rates unchanged. It also raised its FY27 GDP growth forecast to 6.7% while lowering its inflation estimate to 5%, signalling confidence in the domestic economy even as policymakers remain watchful of global uncertainties. Among other financial stocks, PNB Housing Finance climbed 3.9% to its highest level in nearly two years after the mortgage lender reported a rise in June-quarter profit. 

Media Stocks Emerge As Biggest Losers 

The Nifty Media index ended as the day’s worst-performing sector, declining 1.6%. 

Shares of Zee Entertainment Enterprises, PVR INOX, Sun TV Network, and Network18 Media & Investments were among notable laggards, dragging the index lower. 

The weakness in media stocks contrasted with strength in cyclical sectors, highlighting investors’ preference for economically sensitive industries amid improving global sentiment. 

Stock-Specific Moves Dominate Trade 

Apart from sectoral trends, several individual stocks remained in focus following corporate developments and quarterly earnings. 

Ola Electric Mobility surged after announcing its entry into the utility-scale battery energy storage business through a partnership with Axis Energy Ventures India. Restaurant Brands Asia, which operates Burger King in India, extended gains after reporting a narrower quarterly loss and strong growth in its India business. 

Among the decliners, Vodafone Idea remained under pressure as investors continued to assess recent regulatory developments, while Nykaa declined despite posting strong June-quarter earnings and attracting bullish brokerage commentary. 

Market participants said stock-specific action is likely to remain elevated as the June-quarter earnings season gathers pace. Going forward, investors will closely monitor corporate earnings, foreign institutional investor flows and global market cues, while developments surrounding the new closing auction mechanism for futures-and-options stocks are also expected to remain in focus. 

Source

•  NSE