Sensex and Nifty End Lower Amid Volatile Trading Day

The Indian equity markets closed slightly lower on Wednesday following a day of fluctuating trading conditions. The BSE Sensex decreased by 138.74 points, or 0.17%, finishing at 80,081.98. Meanwhile, the NSE Nifty 50 dropped by 36.60 points, or 0.15%, to close at 24,435.50.

Bajaj Finance stood out as the leading gainer, surging by 4.90%, followed by Tech Mahindra which rose 2.14%. Other notable gainers were Tata Consumer Products with an increase of 1.78%, Bajaj Auto climbing 1.75%, and HDFC Bank seeing a rise of 1.26%.

On the downside, Mahindra & Mahindra (M&M) was the top loser, experiencing a decline of 3.22%, followed closely by Sun Pharma with a loss of 2.69%. Eicher Motors fell by 2.07%, Shriram Finance decreased by 1.86%, and Power Grid was down 1.84%.

In broader market movements, the Nifty Midcap 100 and Smallcap 100 indices performed well, increasing around 0.64% and 1.25%, respectively. However, the NIFTY NEXT 50 fell by 0.38% to close at 70,884.70, while the NIFTY MIDCAP SELECT grew by 0.82%, reaching 12,544.15.

Among Sensex stocks, Bajaj Finance led the way with a gain of 4.95%, closing at ₹7,007.95. Tech Mahindra also performed well, rising by 2.28%. Further gains were seen in HCL Tech (+1.29%), TCS (+1.27%), and HDFC Bank (+1.26%). On the negative side, M&M lost 3.23%, with Sun Pharma dipping 2.79%, Power Grid falling 1.86%, NTPC down 1.74%, and Adani Ports decreasing by 1.68%.

The market's breadth was generally positive, with 2,187 stocks advancing versus 1,743 declining on the BSE. During the session, 122 stocks reached their 52-week highs, while 163 hit their 52-week lows. The trading day saw 253 stocks hitting the upper circuit, while 346 touched the lower circuit limits.

Vinod Nair, Head of Research at Geojit Financial Services, remarked that a gloomy investor sentiment was primarily due to disappointing earnings reports and a knee-jerk reaction from foreign institutional investors (FIIs), which negatively impacted market sentiment. Despite the decline, there was some bargain hunting in mid and small-cap stocks, although the sustainability of such buying remains unpredictable.

Sector-wise, performance was mixed. The IT index emerged as the top gainer, rallying by 2.5%, while both the Healthcare and Pharma indices fell over 1.5%. The NIFTY BANK ended slightly lower at 51,239.00, a decline of 0.04%, whereas the NIFTY FINANCIAL SERVICES index gained 0.22%, closing at 23,752.00.

Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, commented that volatility was evident in the early trading hours, but major indices lost their earlier gains in the second half of the day, primarily due to weaknesses in banking, power, oil & gas, and real estate sectors. Nevertheless, gains in IT stocks helped mitigate some losses.

The market's performance was further influenced by ongoing outflows from foreign investors and disappointing quarterly earnings. Ajit Mishra, SVP Research at Religare Broking Ltd, explained that continued foreign investor outflows, combined with disappointing earnings, have negatively affected market sentiment.

FIIs/FPIs were substantial net sellers, with an outflow of ₹3,978.61 crore in the capital market segment. In contrast, domestic institutional investors (DIIs) maintained a strong buying trend, recording a net inflow of ₹5,869.06 crore. Other categories, including clients saw net selling of ₹299.25 crore, and NRIs recorded a minor outflow of ₹0.91 crore. However, proprietary traders showed a net inflow of ₹115.27 crore, indicating ongoing interest from this group.

The India VIX, which measures market volatility, rose by 1.31% to 14.59, reflecting increased market uncertainty. Additionally, the rise in the US 10-year yield signals a potential slowdown in rate cuts by the Federal Reserve, which may impact sentiment towards emerging markets.

As trading began on the day, the market opened lower, with the Sensex starting at 79,921.13 compared to its previous close of 80,220.72, while the Nifty opened at 24,378.15 versus its last close of 24,472.10. Although there were attempts to recover during the session, selling pressure at higher levels hindered any sustained upward movement.

Sensex, Nifty, Stocks, Market