Sector Watch: Why Pharma and Auto Are Still Climbing

Markets see broad-based selling amid global uncertainty; auto, pharma outperform, while metals and banks drag indices lower.

Market Snapshot: A Pause After a Steady Climb

Streak Snapped:
Indian equity markets closed in the red on August 22, breaking a six-day winning streak, as investors turned cautious ahead of US Fed Chair Jerome Powell’s address at Jackson Hole.

• Nifty 50 fell 213.65 points (0.85%) to close at 24,870.10
• Sensex dropped 693.86 points to 81,306.85
• Broader indices like BSE Midcap and Smallcap also closed lower, reflecting wide-based selling pressure.

Despite Friday’s drop, both Sensex and Nifty managed to gain ~1% for the week, signaling continued bullishness over the short term.

Sectoral and Stock Performance: Pharma Gains, Metals Fall

Gainers & Losers:
Among Nifty gainers, the spotlight was on:

• M&M (+0.83%), Bharat Electronics, Maruti Suzuki, Bharti Airtel, and Titan Company

Meanwhile, notable laggards included:

• Asian Paints (-2.42%), Grasim Industries, Adani Enterprises, Hero MotoCorp, and UltraTech Cement

Sector View:

• Pharma rose 0.4%
• Media added 1%
• Metal (-1.25%), IT, FMCG, Oil & Gas, and Banking stocks dragged the indices lower

Best Sector: Nifty Pharma (↑0.39%)
Worst Sector: Nifty Metal (↓1.25%)

Noteworthy Stock Moves

Action Across the Board:

• Foseco India surged 13% after announcing a ₹654 crore stake acquisition in Morganite Crucible
• R Systems gained 6% on a ₹400 crore acquisition
• Lokesh Machines jumped 10% after receiving defense registration
• PTC Industries added 2.5% after a ₹110 crore BrahMos order
• Edelweiss Financial dropped 3% on stake sale plans in its asset management business

High Momentum Stocks:
Over 140 BSE stocks hit 52-week highs, including Procter & Gamble, UNO Minda, Paytm, Cummins India, HDFC AMC, and Apollo Hospitals.

Technical View: Nifty May Consolidate Before Resuming Uptrend

Analyst Take:

• Rupak De, LKP Securities:
  Nifty’s fall signals short-term consolidation. Holding above 24,800 will keep the uptrend intact, with potential for an advance to 25,000–25,250.
• Shrikant Chouhan, Kotak Securities:
  Despite the correction, Indian markets outperformed global peers for the week. Mid and small caps led gains, supported by GST rationalization hopes and sector-specific tailwinds in autos and consumer durables.

Macro Factors to Watch

Global & Domestic Cues:

• Jackson Hole Symposium: Fed’s tone on rate cuts or inflation will influence global sentiment
• Possible US Tariffs: India faces a 50% US tariff risk from August 27, posing export risks
• RBI MPC Minutes: Indicate a pause in rate hikes to let policy effects play out
• Q1FY26 Earnings: Nifty-50 firms delivered 7.5% YoY net profit growth, above expectations

Positives Supporting Sentiment:

• Normal monsoon
• Falling inflation and interest rates
• Lower oil prices
• Government push to boost consumption