Indian shares log fourth week of gains on auto, pharma boost

BENGALURU: India’s benchmark indexes saw a fourth straight week of gains, led by improved growth prospects in auto and pharma sectors.

Both the Nifty 50 and Sensex climbed about 0.3% this week.

“The outlook remains positive for Indian equities,” said Deven Choksey, managing director of DRChoksey Finserv. Choksey attributed the rise in domestic equities to sustained retail inflows, bets of US rates peaking and robust domestic macroeconomic conditions.

Auto index gained 0.80%, hitting record highs during the week.

Hero MotoCorp and Bajaj Auto jumped 6.41% and 5.31%, respectively, extending their post-earnings rally. Both the auto makers were among the top gainers this week.

Pharma stocks advanced 0.95%. The stocks have gained in seven of the eight sessions since the release of soft US inflation data on Nov. 14.

Profit margins in Indian pharma companies will likely remain strong due to easing price erosion in the US and improved prices of active pharma ingredients, analysts at Bernstein wrote in a note.

Realty extended its winning streak to the fourth week, when it added about 1.5%. The stocks jumped 20.57% over the last four weeks, aided by strong quarterly earnings and steady demand outlook.

The more domestically focussed small-caps lost 0.39% this week, and no longer outperformed the blue-chips. Mid-caps rose 0.57%.

“We advise caution in the small- and mid-cap space after the sharp rally in 2023, predominantly driven by retail inflows,” said Pramod Gubbi, founder of Marcellus Investment Management. Small- and mid-caps have gained 42% and 33%, respectively, so far in 2023, outperforming a 9.33% rise in Nifty 50.

On the day, the Nifty 50 index settled 0.04% lower at 19,794.70 levels while Sensex fell 0.07% to 65,970.04.

The Nifty 50 has settled above 19,600 levels in every session since Nov. 14, but has faced resistance at 19,800-19,900 levels.

IT lost 0.42% this week and 0.97% on the day. IT companies, which earn a significant share of their revenue from the US, had jumped 5.07% last week, their best in 16 months.