Indian Blue-Chip Indexes Gain Momentum, Led by IT and Pharma Stocks Amid Soft U.S. Inflation Data

The NSE Nifty 50 index recorded a 0.14% increase, reaching 19,811.85 points, while the S&P BSE Sensex settled 0.14% higher at 66,023.24.

Indian blue-chip indexes experienced a positive trend on Wednesday, bolstered by the performance of IT and pharmaceutical stocks in response to soft U.S. inflation data.

However, the financial sector saw limited gains in comparison.

The NSE Nifty 50 index recorded a 0.14% increase, reaching 19,811.85 points, while the S&P BSE Sensex settled 0.14% higher at 66,023.24.

According to Jaykrishna Gandhi, head of business development of Institutional Equities at Emkay Global Financial Services, there are currently no significant concerns for the Indian markets in the near term.

He noted that Nifty 50 faces resistance near the 19,800 level following its recent rally.

Since November 14, when soft U.S. inflation data suggested that the Federal Reserve would not raise interest rates further, the Nifty has gained approximately 2%.

This development has been particularly beneficial for IT companies, which generate a significant portion of their revenue from the United States.

Over six sessions, IT companies’ stocks rose by 6.3%, with a 0.74% increase on the day.

Similarly, the pharmaceutical index recorded a 0.63% increase on the day, contributing to a total gain of 3.70% over six sessions.

Macquarie recently highlighted that Indian pharmaceutical companies are currently in a favorable position due to improvements in the U.S. generics market. Notably, Cipla was among the top gainers in the Nifty 50.

Bharat Petroleum Corporation saw a notable increase of 3.63% and led the Nifty gainers.

The company announced its intention to consider declaring an interim dividend on November 29, which contributed to its positive performance.

On the other hand, the financial sector, including high-weightage financials, banks, private banks, and public sector banks, experienced losses ranging from 0.2% to 1.2%.

Analysts attributed this weakness to the Reserve Bank of India’s recent decision to tighten regulations governing personal loans and credit cards.

Meanwhile, small-cap stocks with a more domestic focus declined by 1.21%, contrasting with their recent outperformance relative to the Nifty 50.

However, mid-cap stocks closed 0.34% higher.

Vinod Nair, head of research at Geojit Financial Services, noted that the broader market witnessed some profit booking as investor attention shifted towards the primary market, marked by a series of IPOs scheduled for the week.