Nifty, Sensex fail to sustain momentum as IT, FMCG stocks see sharp sell-off

Dalal Street erases early gains.

After opening with steady gains, Dalal Street retreated from the day's high to trade with cuts on the last trading day of the week. Heightened caution amid geopolitical uncertainties pressured the benchmark indices, with the GST reforms failing to lift investor sentiment.

At 12:25 p.m., the Sensex was down 279.54 points or 0.35 percent at 80,438.47, and the Nifty was down 76.30 points or 0.31 percent at 24,658.00. About 1599 shares advanced, 1951 shares declined, and 126 shares were unchanged.

Sectoral trends on Dalal Street were mixed.  Nifty Realty and Nifty IT came under heavy pressure, slipping 1.72 percent and 1.6 percent, respectively. FMCG stocks also saw notable selling, with the index down 1.55 percent. Pharma, PSU Bank, Metal, Energy, Infra, and Media indices traded in the red, though losses were more contained.

The FMCG pack fell to significant profit-booking after recording a rise over the past five sessions. Information and technology stocks also saw selling as reports suggested that US President Donald Trump would explore tariffs on the Indian IT sector.

On the flip side, Nifty Auto led the gainers with a 0.94 percent rise, supported by strength in auto large-caps. Overall, the market mood remained cautious, with autos standing out as the only strong performer.

The broader market also recorded losses, with the Nifty Midcap 100 and Nifty Smallcap 100 trading around 0.15 percent lower each, indicating wide-spread caution.

The in-line outcome of GST rationalisation and ongoing tariff threats from the US exert a negative impact on the market, as per experts. "Given that the US is India's largest export destination, accounting for 2.2 percent of the GDP, the repercussions are inevitable," noted Vinod Nair, Geojit Investments.

"The high valuations even amidst geopolitical and tariff-related headwinds helped bears to accumulate short positions in the market. A significant feature of the present market trend is the weakness in overvalued mid and smallcaps and relative strength in the fairly valued largecaps. This is a healthy trend which can be expected to continue," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

From a technical perspective, the index continues to lack a clear directional trend, as bulls and bears alternate dominance on successive days. Notably, Nifty has remained trapped within a broad consolidation band of 24,500–25,000, and only a decisive breakout beyond this range will trigger meaningful momentum on either side, noted Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities.

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