Indices end largely unchanged; FMCG weighs on Nifty while banking helps limit losses

A decline in Infosys and TCS weighed on the Nifty IT index, which fell by 0.2 percent.

Sensex and Nifty ended the October 24 session largely flat, with FMCG and IT stocks pulling the indices down, while financials and construction stocks offered some support.

At close, the Sensex was down 16 points or 0.02 percent at 80,065, and the Nifty was down 36 points or 0.2 percent at 24,399. About 1,509 shares advanced, 2,256 shares declined, and 95 shares remained unchanged.

Several headwinds have been weighing on market sentiment—disappointing Q2 earnings, relentless selling by Foreign Institutional Investors (FIIs), escalating geopolitical tensions in the Middle East, uncertainty over the pace of US interest rate cuts, the looming US election, and surging US bond yields.

"Looking ahead, we expect things to improve in Q3 FY25, with a stronger rebound in Q4 FY25 as government spending picks up," Sunil Jain, Head of Equity Research - Retail at Nirmal Bang told Moneycontrol. "If we look at capital expenditure, the government has spent only 27 percent of its budget in the first five months, compared to 37 percent last year. This leaves a substantial amount of spending to be done in the remaining seven months, which should support growth in sectors reliant on government funds."

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In the first half of the year, we witnessed a slowdown in various parts of the economy, largely due to reduced government spending, disruptions from elections, and weather-related issues like the heatwave and heavy rains. These factors combined, according to Jain, have caused several sectors to experience corrections over the last three to six months.

"We're already starting to see some positive commentary from IT companies. Pharma has been doing relatively well, and there are signs of a rural recovery, which should further aid consumer demand by Q4. The only question mark remains over urban spending, but even if it remains flat or improves slightly, we should see overall growth in the last four months of the current year," Jain added.

The Nifty FMCG index was under pressure today, dropping nearly 3 percent due to losses in HUL and ITC. HUL shares fell 6 percent after reporting weaker-than-expected Q2FY25 profits, impacted by a slowdown in urban markets and rising costs. ITC shares also slipped over 2 percent ahead of its Q2FY25 results, due later today.

A decline in Infosys and TCS weighed on the Nifty IT index, which fell by 0.2 percent.

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The Nifty Metal index also dipped 0.2 percent, dragged down by Hindalco, whose shares dropped 4 percent after Paris-based Constellium SE's Q3CY24 results indicated weakening demand in the automotive sector, the most profitable segment for Novelis, Hindalco's subsidiary.

The broader market experienced a sharper downturn in today's session, with the BSE Midcap index dropping 0.1 percent and the BSE Smallcap index slipping 0.7 percent.

Top gainers on the Nifty 50 included UltraTech Cement, Shriram Finance, M&M, Titan, and Grasim, with gains ranging from 1-3 percent. On the flip side, HUL, SBI Life, Hindalco, Nestle, and Bajaj Auto were the top losers, shedding between 3-6 percent.

"Nifty has been falling since the last four trading sessions and as a result appears a bit oversold. This can lead to a pullback towards 24,550-24,600 zone," said Jatin Gedia, Technical Research Analyst at Sharekhan. "We expect the selling pressure to emerge again and hence any pullback towards the resistance zone should be considered a selling opportunity," Gedia added. He expects Nifty to find support in the 24,200-24,000 zone in the near term.

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