The BSE Sensex fell 70 points to close at 76,766, while the Nifty 50 slipped 11 points to 23,985. The Nifty Bank index declined 332 points to 56,756, while the Nifty Midcap index gained 48 points to 62,352.
1. HUL drags benchmark indices
HUL emerged as the top loser on the Nifty after reporting a miss on volume, with the stock falling 7% and weighing on the benchmark indices.
2. IT stocks extend gains
Information technology stocks continued to attract buying interest. Tata Consultancy Services (TCS) and Tech Mahindra were among the top gainers on the Nifty.
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Ashish Chaturmohta, Managing Director and Fund Manager, JM Financial Ltd, said on the IT sector, “At one point in time, we were very cautious about the entire IT space. But of late, our view has been changing. First, if you look at the entire AI Bloomberg Value Chain Index, it has been seeing a lot of correction over the last couple of weeks, and there is a very strong inverse correlation between this AI Value Chain Index and Indian IT.
Clearly, over the last month, we have seen very strong outperformance from IT companies. So, obviously, I think there is a strong sector rotation that has started happening from the entire AI, semiconductor and data centre story globally to some of these Indian IT companies. Second, if you look at the quarterly numbers, they were ahead of expectations, and particularly companies like Coforge have posted a very strong set of numbers. So the market is liking these numbers.
From a valuation perspective, most of the large-cap names, whether it’s TCS, Infosys or Wipro, are trading at a 20% to 25% discount to their 10-year averages. That is also giving us a lot of confidence from a valuation perspective. Even from an ownership perspective, if you look at it, at one point in time mutual funds used to own almost 15% to 16% of the holdings, but currently it’s around 5% to 6%.
So clearly, there is extreme under-ownership by institutional investors, and that’s where our thought is that some kind of re-rating will start happening. What we like is Coforge in the entire IT space, and among the large caps, HCLTech and Infosys. These two look quite promising at the current juncture.”
3. Earnings trigger sharp stock-specific moves
Radico Khaitan surged after upgrading its volume and margin outlook for FY27. Cholamandalam Investment and Finance Company ended lower but recovered from intraday lows after reporting an in-line quarter. Suzlon Energy, Godfrey Phillips India and Varun Beverages declined by up to 10% after their quarterly results.
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4. Coforge, Lodha, IEX and Pinelabs gain
Coforge rose more than 10% after saying FY27 is expected to be an exceptional year. Lodha climbed 9%, extending its monthly gain to 36%. Indian Energy Exchange (IEX) added 4%, building on Monday’s gains, while Pinelabs recovered sharply from intraday lows after raising its margin guidance.
5. Avenue Supermarts slips; market breadth remains weak
Avenue Supermarts fell 5% after commentary at its analyst meeting weighed on the stock. Despite gains in select counters and midcaps, the broader market remained weak, with the advance-decline ratio at 1:2, indicating that declining stocks outnumbered advancing shares.
From the Sensex basket, Tata Consultancy Services Ltd, Eternal Ltd, Tech Mahindra Ltd, TVS Motor Company Ltd, Infosys Ltd and Cipla Ltd were the major gainers. Hindustan Unilever Ltd, Bharat Electronics Ltd, Coal India Ltd, Tata Consumer Products Ltd, NTPC Ltd and ICICI Bank Ltd were the biggest laggards.
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