Here are the key factors that helped the market recover:1. IT stocks led the rebound
Buying in information technology stocks supported the benchmarks through the session. Five of the top six gainers on the Nifty were IT stocks—TCS, HCLTech, Infosys, Tech Mahindra and Wipro—helping the Nifty stay above the 24,200 level.
2. Private banks supported the market
The Nifty Bank index rose 86 points to close at 58,131. Kotak Mahindra Bank and ICICI Bank gained 1-2%, lending support to the banking index and the broader market.
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3. Select sectors and stocks attracted buying
Air-conditioner makers extended their gains, with Voltas rising 5% and Blue Star adding 3%. LTIMindtree gained on strong commentary, while Tata Elxsi advanced 2-3% ahead of its earnings. Life insurance stocks also built on Friday’s gains, with ICICI Prudential Life up 7% so far this month.
4. Stock-specific moves kept market interest intact
Kalyan Jewellers continued its sharp rally and is now up nearly 50% over the last four sessions. Happiest Minds Technologies surged 6% following reports of a promoter stake sale.
5. Market breadth remained balanced despite pressure in select stocks
The advance-decline ratio stood at 1:1, indicating broadly balanced participation. However, some stocks remained under pressure.
Avenue Supermarts fell 3% after its first-quarter results, Indian Bank declined 3% after giving up part of Friday’s post-earnings gains, Bharat Dynamics lost 3% on reports of private-sector entry into Astra Mark manufacturing, while Muthoot Finance and Manappuram Finance slipped 2% each as gold prices fell.
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The Nifty Midcap index also ended marginally higher, gaining 4 points to close at 63,041. Auto stocks delivered a mixed performance, with Bajaj Auto and Mahindra & Mahindra advancing while Maruti Suzuki closed lower.
Dipan Mehta, Director, Elixir Equities, on Bajaj Consumer, said, “Bajaj Consumer is largely a single-product company, and that, of course, has its own risks because if the product doesn’t do well or the category doesn’t do well, then certainly you could see lower performance.
So I think it’s pretty well priced at this point in time. In any case, our view on FMCG is negative. There’s a structural slowdown across the entire industry, especially in categories like hair oil, toothpaste, toothbrushes, detergents, shampoos, and so on.
I think investors need to move away from these counters where growth has been tepid for the last several quarters and look at some new-generation FMCG companies which are still showing strong growth because they are present in categories where there is still significant demand, such as Mamaearth, which is Honasa Consumer, or Zydus Wellness, or even, for that matter, Nykaa.
I think those particular categories are still showing very good growth. You could also look at Varun Beverages. It will benefit from a very, very hot summer. So I think we are looking at moving away from the traditional FMCG companies and focusing on a few select new-generation FMCG stocks where there is still underlying growth.”
From the Sensex basket, Tata Consultancy Services Ltd, HCL Technologies Ltd, Tech Mahindra Ltd, Infosys Ltd, Bajaj Auto Ltd and Wipro Ltd were the major gainers. Grasim Industries Ltd, Tata Steel Ltd, Nestle India Ltd, Eternal Ltd, InterGlobe Aviation Ltd and UltraTech Cement Ltd were the biggest laggards.
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Trideep Bhattacharya, CIO-Equities, Edelweiss AMC, on the capital goods sector, said, “I think capex is now a fairly broad-based theme. Some of the stocks have rallied, particularly on the HVDC side, while some on the construction side have corrected quite meaningfully.
Those are the areas where we remain positive. Data centres, again, have seen a good amount of rally. So, within capital goods as a sector, there are three key themes. One is data centres, the second is HVDC, and the third is energy security.
Of these three, stocks related to the first two themes have rallied quite well, whereas companies that provide the nuts and bolts for the energy sector still have some room to go. So, we are selective within capital goods, avoiding stocks that have already seen a significant run-up.”
