Sectoral Gains Make A Mark
Market Watch
The Indian benchmark indices experienced modest gains over the past fortnight, following a robust rally, amid uncertainties surrounding Q1FY25 performance and anticipation of the Union Budget. The BSE Sensex gained by 0.76 per cent, while the Nifty 50 index rose by 0.85 per cent, both indices having recently achieved new record highs. In contrast, the broader indices notably lagged behind the main indices, facing intense selling pressure across consecutive trading sessions. The BSE Mid-Cap fell by 2.48 per cent while the BSE Small-Cap declined by 3.09 per cent during the period.
Investor sentiment was highly volatile, with the information technology (IT) and fast-moving consumer goods (FMCG) sectors enjoying gains of more than 5 per cent each, while the metals, power and automobile sectors bore the brunt of the broader market weakness. Infosys and Tata Consultancy Services spearheaded the IT sector’s gains, driven by strong Q1 performances that exceeded market expectations. The shares of Infosys soared around 9 per cent over the fortnight as the IT major raised its revenue growth guidance for the current fiscal year to 3-4 per cent, up from the previous 1-3 per cent, providing investors with an additional boost.
The FMCG industry safeguarded investors’ wealth as a defensive sector during market uncertainties, with industry leaders Hindustan Unilever and ITC experiencing an uninterrupted and robust rally. The shares of Reliance Industries declined considerably after the company reported a 5.5 per cent year-on-year drop in consolidated profit for the April-June period, impacted by weakness in its oil-to-chemicals (O2C) division and higher depreciation costs,which offset gains in its consumer and oil and gas upstream businesses.
Most banks have released their Q1 results, with all of them reporting significant double-digit growth in both their top-line and bottom-line. According to the latest figures from the Ministry of Statistics and Programme Implementation, consumer inflation has reached a four-month peak at 5.08 per cent. Additionally, food inflation has soared to 9.4 per cent year-on-year in June, marking its highest level in six months.
Benchmark indices continued their uptrend, reaching new record highs, although the pace has slowed as the broader markets faced selling pressures
On the other hand, India’s Index of Industrial Production (IIP) surged 5.9 per cent year-on-year in May, up from 5 per cent in April. Over the past two weeks, foreign institutional investors (FIIs) have consistently been net buyers, while domestic institutional investors (DIIs) have remained sellers for most trading sessions. Consequently, FIIs recorded a significant net inflow of ₹14,790 crore whereas DIIs contributed only ₹1,164 crore to the market during the same period.
