As the investors lap up stocks across sectors, IT and pharma counters that were for long considered as best defensive picks, have taken a back seat with many of them in the CNX Nifty index missing the market rally.
What probably worked against stocks in these sectors was the rally witnessed by the Indian rupee against the US greenback and breaching the Rs 59 vs $ mark.
Of the 50 stocks forming the CNX Nifty, 45 were in the green. Of the bottom five, three were IT and two were pharma stocks - Wipro, Infosys and Tech Mahindra from the IT pack and Cipla and Dr. Reddy’s from the pharma industry.
Cipla shed Rs 3.10 to trade at Rs 395 and Dr. Reddy’s lost Rs 62.40 to Rs 2419.20.
Apart from the bank stocks that were major gainers, auto, power, metals, automobile, capital goods etc witnessed significant gains as the Nifty itself had gained about 270 points.
Sun Pharma and Lupin from the pharma sector and TCS and HCL Tech from the IT industry also made it to the gainers’ list but their gains were not very significant.
Apart from the investors’ willingness to take risks, what probably worked against the pharma and IT stocks that benefited largely from their forex earnings was the strengthening of the Indian currency against the US dollar. The Indian currency breached the Rs 59 mark against the US dollar, gaining about 43 paise to move to Rs 58.86/ US dollar.