Sectoral Watch: PSU Banks Shine After RBI Pause, Oil & Gas Index Gets Reliance Boost, Defence Stocks Surge 

Mumbai, August 6: Sectoral trends remained mixed on Thursday, with investors rotating into public sector banks, oil & gas and select defence stocks, while selling metals, real estate, automobiles and information technology. Stock-specific earnings and brokerage actions dominated trading, helping Indian benchmarks end in the green despite weakness across several cyclical sectors. 

PSU Banks Lead Rally; SBI Among Top Contributors 

The Nifty PSU Bank index emerged as the day’s best-performing sector, climbing 2.2%, as investors accumulated state-owned lenders after the Reserve Bank of India retained its growth-focused stance and raised its FY27 GDP forecast. Optimism over improving credit demand and resilient asset quality also supported buying interest. 

Among individual stocks, State Bank of India (SBI) was one of the biggest contributors to the Nifty’s gains, rising 2.8%. Shares of Punjab National Bank, Bank of Baroda, Canara Bank, Union Bank of India and Indian Bank also traded higher, lifting the sectoral index. 

Oil & Gas Gains 

The Nifty Oil & Gas index advanced 0.8%, mainly due to Reliance Industries as most other constituents appeared in the red. 

Reliance Industries, the heaviest-weighted stock on the Nifty, rose 3.5%, providing significant support to benchmark indices. Shares of oil marketers remained subdued, however, with Bharat Petroleum Corporation (BPCL) declining 0.8%, Hindustan Petroleum Corporation (HPCL) flatlining and Indian Oil Corporation falling 0.9%. Upstream company ONGC also fell 1%. 

Defence Stocks Rally 

The defence pack remained in focus amid strong earnings and positive brokerage commentary. Nifty India Defence index rose 2.9%. 

State run Bharat Electronics (BEL) featured among the top Nifty gainers, rising 2.4%. Meanwhile, Hindustan Aeronautics (HAL) surged after a broker upgraded the stock to “Buy”, citing improving execution of the Tejas Mk1A programme. 

Logistics and pharmaceutical names also witnessed strong buying. Allcargo Logistics rallied sharply after reporting healthy growth in its express distribution and contract logistics businesses, while Morepen Laboratories extended its post-results rally after posting a 394% jump in June-quarter profit. Navin Fluorine International and Neuland Laboratories also gained after reporting strong quarterly earnings, underlining investors’ preference for companies delivering earnings beats. 

Metals, Realty and IT Witness Declines 

Selling pressure remained concentrated in cyclical sectors. 

The Nifty Realty and Nifty Media indices each declined 1.3%, making them the weakest-performing sectoral gauges of the day. Real estate stocks witnessed declines, with DLF, Godrej Properties, Macrotech Developers (Lodha) and Prestige Estates Projects ending lower. 

The Nifty Metal index fell 1%, dragged down by weakness in Tata Steel, JSW Steel, Hindalco Industries and Jindal Steel. Tata Steel and JSW Steel also featured among the biggest losers on the Nifty. 

Information technology shares also came under pressure, with the Nifty IT index slipping 0.9%. TCS emerged as one of the top drags on the benchmark index, while Infosys, HCLTech, Wipro and Tech Mahindra also traded in the red. 

Auto Stocks Underperform 

The Nifty Auto index declined 1% as investors locked in gains after the sector’s recent outperformance. Bajaj Auto was among the biggest losers on the Nifty, while Maruti Suzuki, Mahindra & Mahindra, Hero MotoCorp and Eicher Motors also ended lower. 

Earnings Continue to Dictate Market Leadership 

Analysts said Thursday’s trade reinforced the market’s earnings-driven nature, with investors rewarding companies that delivered strong quarterly numbers while trimming exposure to sectors facing valuation pressures. Optimism over easing geopolitical tensions in the Middle East and stable crude oil prices provided a supportive backdrop, but stock-specific earnings, management commentary and brokerage upgrades remained the primary drivers of sectoral performance. Foreign institutional investor flows and the remaining June-quarter earnings announcements are expected to dictate sector rotation in the coming sessions. 

Source

• NSE