Mid-day Mood | Sensex, Nifty pull back from day's high; bank, IT lead gains

Barring FMCG, all 12 sectoral indices were in the green.

After soaring to new heights, the Sensex and Nifty cooled off from their peak but stayed comfortably in the green, as the Reserve Bank of India's Monetary Policy Committee held the repo rate steady at 6.5 percent and shifted its policy stance from 'withdrawal of accommodation' to 'neutral'.

At 12.25 PM, the Sensex was up 274 points or 0.3 percent at 81,909 and the Nifty was up 106 points or 0.4 percent at 25,119. About 2,585 shares advanced, 779 shares declined, and 94 shares remained unchanged.

"The RBI's decision to keep the rates unchanged is a prudent and well-considered move," said Himani Shah, Co-Fund manager, Alchemy Capital Management. Shah added that the shift to a 'neutral' stance ensures sustainable liquidity conditions that support growth while laying the groundwork for a potential rate cut in the future.

The broader market outperformed benchmarks, with the BSE Midcap and Smallcap indices climbing nearly 1.5 percent each.

Analysts now await the US CPI data due for release on October 10 and the upcoming third-quarter earnings season. Domestically, the Q2 FY25 earnings season will kick off with TCS reporting results on October 10.

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Sectoral Trend

Barring FMCG, all 12 sectoral indices were in the green. FMCG stocks lagged due to losses in ITC, Nestle, and HUL, while banking and IT stocks drove the Nifty higher.

The Nifty Bank index gained 0.5 percent after climbing over 1 percent earlier in the day to surpass 51,600 following the MPC outcome.

Meanwhile, Nifty IT extended its winning streak to four sessions, up 0.7 percent ahead of the Q2 FY25 earnings season. The index rose 0.7 percent led by Infosys, HCLTech, and Wipro.

Nifty Realty emerged as the top gainer, rising over 2 percent, buoyed by stable rates that ensure consistent EMIs, instilling confidence among homebuyers. "This change in policy stance, along with the prospect of rate cuts, will provide crucial support to the low- and mid-value housing segments, which have seen reduced participation over the last 24 months," said Shishir Baijal, Chairman and Managing Director of Knight Frank India.

Fundamental View

"The 'Sell India, Buy China' strategy pursued by the FIIs recently appears to be coming to an end as indicated by the declining FII sell numbers and the profit booking in Chinese stocks, particularly those listed in Hong Kong," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. "An important takeaway from the FIIs vs DIIs tug-of-war that has happened anytime in the ongoing bull rally is that the fight ended in the victory of the DIIs each time. FIIs are selling on valuation concerns. DIIs are buying because they have deep pockets to buy and the pockets are getting deeper. This trend is likely to continue."

Vijayakumar also anticipated BJP's victory in Haryana to come as a morale booster for the party and confidence booster for markets.

Also Read | Bond yield eases 5 bps after RBI changes stance to 'neutral'

Technical View

Sameet Chavan, Head of Technical and Derivative Research at Angel One, noted that Nifty 50 might face resistance in the 25,100-25,300 range. "An authoritative move beyond the same could only bring the mojo back into the markets."

Key Nifty gainers

Shriram Finance, Trent, Tata Motors, Bajaj Finance, SBI

Key Nifty losers

Nestle, ONGC, ITC, Britannia, HUL

Key Sensex gainers

Tata Motors, Bajaj Finance, SBI, Bharti Airtel, Axis Bank

Key Sensex losers

Nestle, ITC, HUL, RIL, HDFC Bank

Stock Moves

Premier Energies: Shares rose 7 percent after the company's subsidiary, Premier Energies International finalised a solar module supply agreement with BN Hybrid Power-1, a special purpose vehicle under BrightNight India.

Ajmera Realty and Infra India: Shares soared over 5 percent after the company released healthy business updates for the July-September quarter. At 11.04 am, shares of Ajmera Realty were trading at Rs 668 on the NSE.

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