Sensex and Nifty End Lower Amid Volatile Trading; IT Stocks Shine While Pharma Dips

The Indian stock market faced a turbulent trading session, concluding with notable declines on key indices. The BSE Sensex decreased by 138.74 points, or 0.17%, ending the day at 80,081.98. Similarly, the NSE Nifty 50 fell by 36.60 points, or 0.15%, closing at 24,435.50.

Major Movers in the Market

Amidst the broader market fluctuations, Bajaj Finance emerged as a standout performer, soaring 4.90%. Other gainers included Tech Mahindra up 2.14%, Tata Consumer Products rising 1.78%, Bajaj Auto gaining 1.75%, and HDFC Bank increasing by 1.26%.

Conversely, M&M was the biggest loser, declining 3.22%. Following it were Sun Pharma at -2.69%, Eicher Motors at -2.07%, Shriram Finance at -1.86%, and Power Grid at -1.84%.

Broader Market Trends

The broader market players showed better performance compared to the benchmarks. The Nifty Midcap 100 and Smallcap 100 indices rose by about 0.64% and 1.25%, respectively. In comparison, the NIFTY NEXT 50 fell by 0.38% to 70,884.70, while the NIFTY MIDCAP SELECT increased by 0.82%, reaching 12,544.15.

Investor Sentiment and Market Dynamics

Market sentiment was characterized by a mix of emotions, with some investors enticed by the lower prices of mid and small-cap stocks amidst recent sell-offs. The market breadth was positive, with 2,187 stocks advancing compared to 1,743 that declined on the BSE. During the trading day, 122 stocks reached their 52-week highs while 163 hit their 52-week lows, indicating active trading with 253 stocks hitting the upper circuit limits and 346 reaching the lower circuit limits.

According to Vinod Nair, Head of Research at Geojit Financial Services, "Investor sentiment turned gloomy due to tepid earnings results, coupled with a knee-jerk reaction from foreign institutional investors (FIIs) that negatively impacted market psychology." Nair also noted that while mid and small-cap stocks saw some bargain hunting, the longevity of this buying trend remains uncertain.

Sector Performance

Sector-wise, the performance was mixed. The IT index emerged as a leading gainer, rallying 2.5%, while the healthcare and pharmaceutical indices witnessed declines of over 1.5%. The NIFTY BANK index closed slightly lower at 51,239.00, down 0.04%, with NIFTY FINANCIAL SERVICES gaining 0.22% to finish at 23,752.00.

Prashanth Tapse, Senior VP of Research at Mehta Equities Ltd, commented, "Key indices experienced volatility early in the session but lost ground in the second half due to weaknesses in banking, power, oil & gas, and real estate sectors. The recovery in IT stocks was crucial in helping the markets limit their losses."

Foreign Investment and Market Trends

One of the critical issues affecting the markets was the consistent outflow of foreign investors and disappointing earnings reports. Ajit Mishra, SVP of Research at Religare Broking Ltd, explained, "The ongoing concern of foreign investor outflows, combined with lackluster earnings, is significantly dampening market sentiment." During this session, FIIs/FPIs were significant net sellers with an outflow of ₹3,978.61 crore, while Domestic Institutional Investors (DIIs) continued their buying spree with a net inflow of ₹5,869.06 crore. On a broader scale, clients recorded net selling of ₹299.25 crore, with NRIs showing a minor outflow of ₹0.91 crore.

In terms of volatility, the India VIX, a key measure of market unpredictability, rose by 1.31% to 14.59, reflecting increased market anxiety. The upward movements in the US 10-year yield indicated a slower approach to rate cuts by the Federal Reserve, potentially influencing sentiment towards emerging markets.

Trading Overview

The market opened lower, with the Sensex starting at 79,921.13, down from its previous close of 80,220.72, and the Nifty beginning at 24,378.15 compared to its last close of 24,472.10. Despite initial recovery attempts throughout the session, mounting selling pressures at higher levels prevented any sustained upward momentum.

Stocks, Market, IT, Pharma, Investors