Nifty rises 0.64% as IT and financial stocks lead rebound

Indian equities recovered after a prolonged run of declines as softer US Treasury yields and firmer Asian markets improved the tone at the open. The move broadened beyond the large technology names, with financial stocks and selected internet and realty shares providing support.

Bajaj Finance was reported as the largest positive contributor to the Nifty, while Eternal, HDFC Bank, Infosys and ICICI Bank were also among the main supports. Market reports attributed the strength in IT to a recovery after recent weakness and the broader financial-sector move to relative strength in private-sector banks. Shriram Finance, Kotak Mahindra Bank and Jio Financial were among the other prominent gainers.

Hindalco was the largest reported drag, while InterGlobe Aviation, Apollo Hospitals, Tata Consumer Products and Nestle India also weighed. An analyst cited profit booking and position unwinding rather than a clear deterioration in long-term fundamentals as an explanation for weakness in copper-related activity. That helped explain why metals lagged even as construction-linked and financial names attracted buying.

The NBFC and insurance advance reflected strength in lenders and non-bank financial companies, including Shriram Finance, Bajaj Finance and Muthoot Finance. LIC and LIC Housing Finance also gained, while the Reserve Bank’s approval for LIC to raise its holding in HDFC Bank to up to 9.99% provided a company-specific financial-sector catalyst.

Telecom and internet shares benefited from the broader risk-on tone and strength in consumer-internet names. Eternal was among the leading Nifty gainers, while Meesho recorded its strongest reported gain in eight weeks on volume well above its five-day average. The available reports did not identify a single sector-wide policy trigger for the telecom and internet move.

Cement and materials stocks were firm in the recorded sector reading, but the available market reports did not name a specific cement-stock catalyst. In contrast, metals were linked by an analyst to profit booking and position unwinding in copper. Elevated crude remained a restraint on the energy complex, limiting the participation of oil and energy shares in the rebound.

The RBI’s August policy minutes kept the rate outlook in focus. The Monetary Policy Committee had unanimously left the repo rate unchanged at 5.25%, but the minutes showed policymakers considering the risk that higher energy costs could feed into broader inflation. The reported policy stance was therefore one of waiting for greater clarity rather than signalling an immediate change.

The 10-year government bond yield rose as the market absorbed the more cautious inflation message. For Indian equities, the implication is that lower global yields supported the session, but domestic rate expectations and imported energy costs continued to limit the scope for an unqualified risk-on interpretation.

SEBI was reported to be considering a wider overhaul of trading rules, including easier stock lending and short-selling, lower collateral requirements for highly liquid cash equities and longer-dated derivatives. These are proposed reforms, not implemented changes. SEBI also warned against manipulation of the new Closing Auction Session and asked brokers to accept orders during the transition period before the auction window.

Global markets supplied the principal overnight support. US equities recovered after the US Treasury announced plans to increase buybacks of longer-dated debt, pulling long-term Treasury yields lower. Asian equities followed higher as the bond-market pressure eased and the dollar weakened to a three-month low.

Brent crude remained above $91 a barrel, keeping attention on the effect of energy costs on India’s inflation, current account and corporate margins. The rupee strengthened in early trade alongside the softer dollar, although market commentary cautioned that elevated oil prices could limit the durability of the currency recovery.

Foreign institutional investors were net buyers of Indian equities for a second consecutive session on the latest available exchange data, while domestic institutions continued to provide stronger support. The flow backdrop helped the rebound, but the available data do not establish whether the buying was concentrated in any particular sector.

Corporate news was mixed but provided several stock-specific catalysts. Hyundai Motor India said it would raise vehicle prices by up to 1% across its portfolio from September, while United Spirits benefited after the food regulator revoked an earlier order concerning a product manufactured at its Baramati unit. Strides Pharma said the US Food and Drug Administration had closed its Bengaluru facility inspection after five observations in the earlier Form 483.

Order announcements included an approximately Rs 190.86-crore water-treatment project for which EMS received L-1 status, a Rs 110-crore Tata Motors Passenger Vehicles award for Autoline Industries, and a Rail Vikas Nigam letter of acceptance from East Coast Railway worth Rs 161.02 crore. Autoline said the Tata Motors programme could add approximately Rs 80 crore in annual revenue once ramped up, with tooling contributing approximately Rs 30 crore as a one-time amount.

XtraNet Technologies reported profit of Rs 6.04 crore, up 77.9% year-on-year, on revenue of Rs 50.5 crore, up 10.5% year-on-year. Lohia Corp reported profit of Rs 66.3 crore, four times the year-ago figure, on revenue of Rs 503 crore, up from Rs 315.4 crore in the corresponding period. No consensus estimates were available in the supplied material, so the results cannot be assessed against a market expectation.

Primary-market activity remained active. Sunshine Pictures’ Rs 282-crore issue, priced in the Rs 342 to Rs 360 range, closed on August 20 and was reported to have drawn subscription of more than 27 times. The available material did not report a listing on the day.

The session also saw a large secondary transaction in Aster DM Quality Care, with the promoter-linked seller disposing of a 6.66% stake and institutional buyers taking shares. Goldman Sachs’ purchase of a 0.55% stake in Shiprocket added a separate institutional transaction to the day’s deal flow.