Nifty settles under 25,200 on weekly expiry, Sensex dragged by selling in financials, all sectors in red

Nifty, Sensex closed in the red.

After seeing a smart open, the benchmark equity indices Nifty 50 and Sensex fell to selling pressure. The key negative contributors, dragging the headline gauges, were from the banking and financial pack, with SBI, Bajaj Finance and ICICI Bank leading the losses.

At close the Sensex was down 297.07 points or 0.36 percent at 82,029.98, and the Nifty was down 81.85 points or 0.32 percent at 25,145.50. About 1279 shares advanced, 2755 shares declined, and 113 shares unchanged.

Nifty Media, Nifty Metal, Nifty PSU Bank and Nifty Consumer Durables sank over one percent each, while all the sectors also traded in the red, indicating that the sell-off was wide-spread. The broader markets faced deeper selling, with the Nifty Midcap 100 tumbling 0.9 percent and the Nifty Smallcap 100 falling over one percent.

After nearly a year of relative underperformance, we believe conditions are gradually turning favourable for equities. The stage appears set for a measured revival in market sentiment and risk appetite, noted analysts at JM Financial.

PL Capital values the Nifty at its 15-year average P/E multiple of 19.2x, based on a Sept’27 EPS estimate of Rs 1,499, arriving at a 12-month target of 28,781 (previously 27,609).

In its bull case, PL Capital assigns a higher multiple of 20x, implying a target of 30,220 (earlier 28,990). In the bear case, assuming Nifty trades at a 10 percent discount to its long-period average, it derives a target of 25,903 (earlier 24,848).

Further, the Indian rupee closed near a record low, pressured by broad-based dollar strength and weaker regional currencies. Sentiment remains fragile amid US-China trade uncertainty and risk-averse moods. "However, the rupee has demonstrated resilience, consolidating in a narrow range over the past two weeks due to central bank intervention and foreign fund inflows. Near-term, spot USDINR finds support at 88.50 and faces resistance at 89.10," said Dilip Parmar – Senior Research Analyst, HDFC Securities.

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