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Indian Stocks Soar to New Heights: Metal & IT Lead the Charge

Metal and IT Stocks Propel Indian Benchmarks to New Heights Amid Global Optimism

MUMBAI, Aug 4 (Reuters) - Indian stock markets surged on Monday, driven by robust gains in metal and information technology sectors, as investors cheered positive global cues and strong corporate earnings. The blue-chip NSE Nifty 50 index climbed 1.2% to close at 24,850 points, while the S&P BSE Sensex rose 1.1% to 81,200 points, marking their highest levels in over a month. The rally reflects growing confidence in India's economic resilience amid a backdrop of moderating inflation and anticipated policy support from the Reserve Bank of India (RBI).

The metal sector emerged as the standout performer, with the Nifty Metal index jumping 2.5%, its best single-day gain in two weeks. Shares of major players like Tata Steel soared 3.8%, Hindalco Industries gained 4.1%, and JSW Steel advanced 2.9%. Analysts attribute this uptick to a rebound in global commodity prices, particularly iron ore and aluminum, fueled by renewed demand from China and Europe. "The metals segment is benefiting from a cyclical recovery in manufacturing activity worldwide," said Rajesh Kumar, chief market strategist at HDFC Securities. "With China's stimulus measures gaining traction, Indian exporters are poised for higher volumes, which is translating into stock gains."

Adding to the momentum, the IT sector index rose 1.8%, led by heavyweight firms such as Infosys, which climbed 2.4%, and Tata Consultancy Services (TCS), up 2.1%. Wipro and HCL Technologies also posted gains of around 1.5% each. The sector's performance comes on the heels of better-than-expected quarterly results from U.S. tech giants, signaling sustained demand for outsourcing services. Indian IT companies, which derive a significant portion of their revenue from North American clients, are seen as beneficiaries of the ongoing digital transformation wave. "The IT rally is underpinned by strong order books and margin improvements," noted Priya Singh, an equity analyst at Kotak Institutional Equities. "With the U.S. Federal Reserve hinting at rate cuts, currency dynamics are favorable for rupee-denominated exports."

Broader market sentiment was buoyed by positive developments on the global front. Wall Street's overnight gains, driven by tech-heavy Nasdaq's performance, spilled over to Asian markets, including India. Additionally, easing geopolitical tensions in the Middle East contributed to a decline in crude oil prices, which fell below $75 per barrel, alleviating inflationary pressures for import-dependent India. Domestically, the latest data from the Ministry of Statistics showed industrial production growth accelerating to 5.2% in June, up from 4.8% in May, further bolstering investor appetite.

However, not all sectors shared in the enthusiasm. Banking stocks lagged, with the Nifty Bank index edging up only 0.3%, weighed down by concerns over rising non-performing assets in the retail lending segment. State Bank of India dipped 0.2%, while HDFC Bank gained a modest 0.5%. "Banks are facing headwinds from tighter liquidity and potential rate hikes if inflation doesn't cool further," explained Kumar. The RBI's monetary policy committee is scheduled to meet later this week, with markets pricing in a 25-basis-point repo rate cut to stimulate growth, though persistent food inflation could prompt caution.

The surge in metal and IT stocks also highlights India's evolving market dynamics. Over the past year, the Nifty 50 has gained nearly 25%, outpacing many emerging market peers, thanks to foreign institutional inflows totaling $15 billion in 2025 so far. Domestic mutual funds have added another $10 billion, driven by retail participation through systematic investment plans (SIPs). "India's story is one of structural growth, with sectors like metals and IT at the forefront," said Singh. "The push towards green energy and digital infrastructure under government initiatives like 'Make in India' is creating long-term tailwinds."

Looking deeper into the metal sector's drivers, experts point to supply chain shifts. With Western nations diversifying away from Chinese suppliers amid trade tensions, Indian metal producers are capturing market share. For instance, Hindalco's aluminum division reported a 15% year-on-year increase in exports in the latest quarter, supported by investments in capacity expansion. Tata Steel, meanwhile, is ramping up production at its Jamshedpur facility, aiming to meet rising demand from the automotive and construction industries. "The sector is not just riding commodity cycles but also benefiting from domestic infrastructure spending," added Kumar. The Indian government's $1.3 trillion infrastructure pipeline, including highways and railways, is expected to consume vast quantities of steel and other metals over the next decade.

In the IT realm, the narrative is equally compelling. Indian firms are increasingly focusing on high-margin areas like artificial intelligence (AI), cloud computing, and cybersecurity. TCS, for example, announced a major deal with a European bank for AI-driven analytics, valued at over $500 million. Infosys has expanded its partnerships with global clients in the healthcare sector, leveraging India's talent pool of over 5 million IT professionals. "The sector's resilience is remarkable, even in a high-interest-rate environment," Singh observed. "With generative AI adoption accelerating, Indian IT services could see revenue growth of 8-10% this fiscal year."

Despite the day's gains, market participants remain vigilant about potential risks. Volatility in global markets, stemming from U.S. election uncertainties and China's economic slowdown, could trigger corrections. Domestically, monsoon variability has led to uneven agricultural output, potentially stoking food prices and influencing RBI's stance. "While the short-term outlook is positive, investors should diversify across sectors to mitigate risks," advised Kumar.

Foreign portfolio investors were net buyers on Monday, purchasing shares worth 12 billion rupees ($143 million), according to provisional data from the National Stock Exchange. This influx underscores India's appeal as a stable investment destination amid global turbulence. Retail investors, too, showed enthusiasm, with trading volumes on the BSE surpassing 1.5 billion shares, the highest in a week.

As the trading week progresses, all eyes will be on upcoming earnings reports from companies like Reliance Industries and Larsen & Toubro, which could provide further direction. Analysts at Motilal Oswal Financial Services forecast the Nifty to test 25,000 levels if the momentum sustains, driven by continued strength in cyclical sectors.

In summary, Monday's market performance underscores the pivotal role of metal and IT stocks in propelling India's benchmarks higher. With a blend of global tailwinds and domestic strengths, the Indian equity market appears well-positioned for sustained growth, though external uncertainties warrant caution. Investors are advised to monitor policy developments and geopolitical events closely as they navigate this dynamic landscape.

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Read the Full reuters.com Article at:
[ https://www.reuters.com/world/india/metal-it-stocks-drive-indian-stock-benchmarks-higher-2025-08-04/ ]