Financials, Auto Drag; Pharma Stocks Shine in Weak Market
By Business Correspondent
Indian equity markets extended losses for a second consecutive session on Thursday, as rising crude oil prices and persistent global uncertainty triggered broad-based selling. Benchmark indices ended sharply lower, with heavyweight financial and auto stocks leading the decline.
The S&P BSE Sensex tumbled 852.49 points, or 1.09%, to close at 77,664, while the Nifty 50 fell 205.05 points, or 0.84%, to settle at 24,173. Over the past two sessions, the indices have declined over 2%, reflecting a shift in market sentiment amid external headwinds.
Broad-Based Weakness, Volatility Rises
The broader market mirrored the weakness, with the BSE MidCap and SmallCap indices slipping 0.33% and 0.49%, respectively. Market breadth remained negative, with declining stocks outnumbering gainers significantly.
Investor caution was also evident in volatility metrics, as the India VIX rose 1.58% to 18.59, indicating heightened near-term uncertainty.
Sectoral Trends: Pharma Outperforms, Autos and Banks Drag
Sector-wise, defensives provided some respite. The Nifty Pharma and Healthcare indices emerged as top gainers, supported by strong buying in stocks like Dr. Reddy’s Laboratories, which surged over 9%. Media stocks also posted modest gains.
On the flip side, cyclical sectors bore the brunt of selling pressure. The Nifty Auto index declined 2.35%, while PSU banks and consumer durables stocks fell sharply, reflecting concerns over demand and margin pressures amid rising input costs.
Macro Data Signals Resilience
Despite market weakness, macroeconomic indicators painted a relatively positive picture. The HSBC Flash India Composite PMI rose to 58.3 in April from 57.0 in March, indicating robust expansion in business activity.
The services sector remained strong, with the Services PMI at 57.9, while manufacturing activity accelerated further. The Manufacturing PMI climbed to 55.9, with output hitting a multi-month high, signaling improving industrial momentum.
Key Market Indicators
Bond yields edged higher, with the 10-year government security yield rising to 6.95%, reflecting tightening liquidity conditions. The rupee weakened to 94.12 against the US dollar, tracking a stronger dollar index.
Gold prices declined modestly, while crude oil surged sharply. Brent crude climbed above $103 per barrel, driven by supply concerns linked to tensions around the Strait of Hormuz—a key global oil transit route.
Global Cues Remain Fragile
Global markets offered little support. US futures pointed to a weak opening, while European equities traded lower amid rising energy costs and slowing growth signals. Economic data from the eurozone showed contraction in business activity, with the composite PMI slipping below the 50-mark.
Asian markets also ended in the red, reflecting investor concerns over geopolitical risks despite a temporary ceasefire in the Iran conflict. Uncertainty surrounding negotiations and continued disruptions in the Strait of Hormuz have kept risk appetite subdued.
Stocks in Focus
Among key movers, Jio Financial Services gained around 4% after announcing a joint venture with Allianz in the general insurance space. However, financial stocks broadly remained under pressure, with Union Bank of India falling over 8% on weaker-than-expected earnings.
Consumer and industrial names also saw sharp declines. Havells India dropped 7% on a cautious outlook, while Trent fell 4% despite strong quarterly results. IT stocks like Infosys slipped ahead of earnings announcements.
In contrast, select pockets showed strength. Sugar stocks extended gains, while Oracle Financial Services Software surged over 9% on strong results. Delta Corp hit the upper circuit following upbeat earnings.
Oil, Currency and Rates in Focus
The surge in crude oil prices remains a key concern for markets, as it could widen India’s current account deficit and fuel inflation. Simultaneously, a weakening rupee and rising global bond yields are adding to investor caution.
Outlook: Cautious Near-Term View
Going forward, markets are likely to remain volatile, with investors closely tracking geopolitical developments, crude oil prices, and corporate earnings. While strong PMI data indicates underlying economic resilience, external risks continue to overshadow domestic positives.
Bottom Line:
The recent correction highlights the market’s sensitivity to global cues, particularly energy prices and geopolitical tensions. Defensive sectors like pharma are offering stability, but sustained recovery will depend on easing global risks and supportive earnings momentum.