Top Gainers and Losers: How Auto, IT, Banks and PSU Stocks Acted in Recent Sessions
Auto stocks roar while IT cools off: Banks steady, PSUs split — sector-by-sector take on recent market action
Lead / TL;DR
In the latest market sessions, automobile stocks led gains as December sales and upbeat sector news lifted the space, while IT names lagged amid weak global demand. Banks showed steady performance on improving credit trends and select corporate updates, and PSUs delivered a mixed bag — a few big winners but plenty of underperformers. Here’s a concise, sector-by-sector guide to what happened, why it happened, and what to watch next.
Market context (quick snapshot)
Benchmarks rose modestly in the most recent session with the Nifty trading higher, supported primarily by autos and cyclical pockets; broader market momentum was capped by mixed cues from consumption and IT. Specific session moves included a mid-single-digit sectoral lift in autos versus weakness in some large-cap IT names.
1) Automobile & ancillaries — the day’s leader
What happened: Autos outperformed, with major players rising after stronger-than-expected December sales data and positive commentary on Q4 prospects. Hero MotoCorp, TVS Motor and other OEMs were among the notable gainers in recent sessions.
Why it happened: The auto upmove was driven by:
- Firm retail sales numbers that suggest demand resilience.
- Expectations of margin recovery from product cycles and price realization.
- Flow of positive analyst commentary and selective stock-specific triggers (earnings previews, product launches, management guidance).
What to watch: Wholesale-to-retail inventory trends, commodity inflation (steel, commodities), and quarterly sales/earnings — these will determine whether the auto rally is durable.
2) Information Technology (IT) — lagging amid weak global demand
What happened: IT stocks underperformed relative to the market. Large-cap IT firms saw muted moves or declines as investors digested weak client demand from key markets and cautious guidance.
Why it happened: Headwinds include:
- Slower digital spending from Western clients, especially in discretionary projects.
- Previous foreign outflows from the sector and valuation compression after multi-year rallies.
- Earnings season that, in some cases, disappointed street expectations.
What to watch: Offshore demand trends (particularly the U.S.), deal wins and attrition rates, and guidance for FY/next-quarter revenue. Any early signs of a rebound in discretionary spend could re-rate the sector.
3) Banks (private and PSU banks) — steady, selective strength
What happened: Bank stocks broadly moved higher in pockets where corporate updates or asset-quality improvements were reported. PSU banks and some private banks both had days of outperformance depending on news flow.
Why it happened: Factors supporting banks:
- Improving credit growth and early signs of higher loan demand.
- Stable margins (or expectations thereof) as interest-rate trends normalize.
- Select earnings / management commentary and positive sectoral technicals (advances over declines).
What to watch: NIM trajectory, slippage/loan-loss provisioning trends in Q4 results, and any regulatory/budget cues that can affect PSU banks differently from private banks.
4) PSU stocks — winners and washouts; highly selective
What happened: PSUs were a mixed cohort: some delivered strong multi-month gains while many others lagged or declined. In 2025, for example, there were large dispersion outcomes among PSUs — several delivered huge returns while a significant number underperformed.
Why it happened: PSU performance is often driven by:
- Policy and budget announcements (infrastructure, defense, energy).
- Select privatization or government-support signals.
- Company-level fundamentals — many PSUs have widely diverging balance-sheet and earnings stories.
What to watch: Budget announcements, policy support for strategic sectors, and corporate governance/asset-monetization moves that can create outsized winners among PSUs.
Cross-sector drivers that explain recent moves
- Macroeconomic & policy cues: RBI guidance, inflation, and fiscal spending expectations (budget) affect cyclicals and PSUs.
- Earnings season: Sectoral earnings beats/misses strongly influence intra-day and multi-day moves — autos and banks have benefited where earnings looked constructive; IT has struggled where guidance was cautious.
- Foreign flows & valuations: Past foreign outflows from IT and rotation into cyclicals influenced relative sector performance.
Data & metrics (what the charts tell us)
- Moneycontrol’s sector matrix shows Software & IT Services with elevated sector PE and a bearish/underweight technical setup recently, while Automobile & Ancillaries have been more neutral-to-bullish on session data. These screener metrics (adv/decline, sector PE) can help identify which sectors are stretched and which have room to run.
- Live market feeds show sector rotation into PSUs/Auto on some sessions, with FMCG/defensives occasionally lagging on specific tax or policy news.
Investment-minded takeaways (practical)
- If you’re bullish on cyclical recovery: look for selective exposure to autos and industrial PSUs that have improving earnings visibility and healthy order books. Monitor inventory and commodity inputs.
- If you prefer quality/defensive: consider high-quality banks with strong liability franchises and conservative provisioning; avoid broad-brush PSU bets — be selective.
- For value hunters in IT: wait for clearer signs of a turnaround in overseas discretionary spend or look for companies with strong deal pipelines and margin resilience.
Quick checklist for investors (before you act)
- Are gains driven by fundamentals (sales, margins) or just momentum?
- Has the valuation gap between sectors widened enough to consider rotation?
- Are macro or policy events (budget, RBI moves) coming that could swing sector leadership?
Answer these to decide whether to buy, hold, or trim.
Conclusion
Recent sessions have highlighted a classic market rotation: cyclical autos and select PSUs capturing upside on tangible demand/policy cues, while IT struggles with external softness. Banks remain the middle ground — not the hottest, but offering selective opportunities where fundamentals are strong. For investors, the message is simple: be sector-selective, watch earnings and policy calendars closely, and don’t mistake short-lived momentum for durable earnings improvement.
Reviewed by Aparna Decors
on
January 04, 2026
Rating:
