Sensex, Nifty trade higher amid buying in pharma, banking stocks

Indian equity markets traded higher despite rising crude oil prices and geopolitical tensions, led by gains in pharma and banking stocks. Sensex and Nifty climbed over 0.6 per cent, while IT shares lagged amid rupee concerns, FPI selling pressure and global market uncertainties

Mumbai: Domestic equity markets traded higher on Thursday despite elevated oil prices and geopolitical tensions, with benchmark indices rising up to 0.7 per cent amid buying in pharma and banking shares in early trade.

Sensex rose as much as 462 points or 0.61 per cent to touch an intraday high of 75,071 in morning trade, while Nifty traded around 170 points or 0.72 per cent higher at 23,581. Sector-wise, buying interest was seen in pharma and healthcare, metals, chemicals, banking, energy, cement and FMCG stocks, with respective indices gaining over 1 per cent.

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On the other hand, Nifty IT emerged among the top laggards amid selling pressure in HCLTech, Infosys, Tata Consultancy Services (TCS) and Tech Mahindra, which declined up to 1 per cent. The volatility tracker India VIX rose more than 3 per cent to nearly 19.

A market expert said money is moving into markets such as the US, Japan, South Korea and Taiwan, which are performing strongly. “As long as the outperformance of these markets and the underperformance of India continue, foreign portfolio investors (FPIs) will continue to sell, which, in turn, will further drag the rupee down,” the expert said.

“The situation will change only if the Strait of Hormuz opens and crude oil prices fall, or if the AI trade attracting FPI flows into AI leaders ends. There is no clarity on when this will happen,” the expert added.

The analyst further said sustained depreciation of the rupee has negative implications for the market. “Imported inflation will rise. Margins of companies with petroleum-based inputs will be impacted, while exporters will benefit.

Pharmaceuticals will remain a safe bet since demand for medicines is relatively inelastic and the sector will benefit from rupee depreciation. Textiles will also gain. IT, though a potential beneficiary, will continue to remain under pressure due to the Anthropic shock,” the analyst noted.

On the commodities front, international benchmark Brent crude rose 0.52 per cent to $106.18 per barrel, while US West Texas Intermediate (WTI) crude gained 0.71 per cent to $101.74.

In Asia, markets showed a mixed trend. Japan’s Nikkei traded flat, while Hong Kong’s Hang Seng and South Korea’s KOSPI edged higher. Indonesia’s Jakarta Composite and China’s Shanghai Composite declined up to 2 per cent. Overnight in the US, Wall Street ended higher, with the S&P 500 gaining 0.59 per cent and the Nasdaq closing 1.2 per cent higher.