Sensex falls 300 pts from day's high as volatility reigns; bank stocks rally; mid, smallcaps shine

HDFC Life, HDFC Bank, Bajaj Finserv, NTPC, and Apollo Hospitals were the top gainers on the Nifty.

Amid volatility, benchmark indices Nifty and Sensex erased most of the day's gains to trade within a narrow range, weighed down by auto, FMCG, and metal stocks. However, private and public sector banks, along with realty stocks, outperformed on December 4. Market experts' expectations of a potential cash reserve ratio (CRR) cut by Reserve Bank of India (RBI), later this week, to enhance liquidity sparked a rally in financial stocks.

At close, the Sensex was up 110.58 points or 0.14 percent at 80,956.33, and the Nifty was up 10.30 points or 0.04 percent at 24,467.45. About 2,307 shares advanced, 1,507 shares declined, and 95 shares unchanged.

Follow our LIVE blog for all the latest market updates

"Given that we've seen a decent rally this week, the markets could likely consolidate today as investors would take partial profits off the table, " Deepak Jasani, Head of Retail Research at HDFC Securities, said. "The undertone remains positive for the markets as the pace of FII selling has notably reduced in the past couple of weeks, " he added.

In today's trade, the PSU bank index was the brightest spark with gains of over 2 percent, extending a rally from Tuesday during which the index rallied 2.5 percent. India's largest public sector bank State Bank of India gained almost 2 percent. Other state-owned banks like UCO Bank, Central Bank, Indian Overseas Bank and Punjab & Sind Bank were among the top gainers on the index on Wednesday. While shares of UCO Bank have gained as much as 9 percent, the other three have seen gains between 6 percent to 7 percent.

Nifty Bank also closed 1 percent higher. This comes on the back of optimism built around potential liquidity measures in the Reserve Bank of India’s (RBI) upcoming monetary policy meeting. Expectations of a potential Cash Reserve Ratio (CRR) cut drove gains across banking stocks.

Nifty Realty also soared over 2 percent led by gains in Oberoi Realty, Macrotech Developers, Prestige Real Estates, and DLF. Oberoi Realty rallied 5 percent after global brokerage firm Nomura initiated coverage on the stock with a 'buy' recommendation and a price target of Rs 2,500.

Also read: Adani-run Ambuja Cement evaluates deal to acquire Star Cement for expansion in Northeast

Nifty Auto, down 0.7 percent, witnessed a large selloff as heavyweights such as Tata Motors, Maruti Suzuki, Bajaj Auto and M&M dragged the index lower. Demand outlook for the sector remains weak amid a slowdown in rural and urban consumption. The metal index followed suit with losses of 0.2 percent. Major names such as Tata Steel, JSW Steel, and Hindalco traded in the negative. Nifty FMCG, Pharma, and Healthcare also slipped up to 0.3 percent.

The mid and small cap indices continued to show resilience and outperformed the frontline indices for a ninth session with gains of 1 and 0.9 percent, respectively. Analysts attribute this resilience to sustained interest from HNIs and retail investors, who remain confident and are focusing on quality picks. Jasani noted that the uptrend may persist, as India's markets, having lagged behind global peers in recent months, are now catching up.

Auto major Bajaj Auto slipped nearly 2 percent following reports that the company has cut prices of its Freedom 125, the world's first CNG motorcycle, just five months after its launch. Brokerage firm UBS Securities pointed out that the two-wheeler company has cut prices for Freedom 125's entry-level variant by Rs 5,000 and mid-level variant by Rs 10,000 while also slashing prices for select Pulsar variants post Diwali.

PB Fintech shares rallied over 3 percent after the company announced the approval of the incorporation of a wholly owned subsidiary under the proposed names 'PB Healthcare' or 'PB Healthcare Services,' or any other name as approved by the Ministry of Corporate Affairs, Government of India.

Read more: For 2025, Kotak AMC sees opportunities across spaces despite recent slowdown

Shares of Suzlon Energy Ltd jumped 4 percent on December 4 after the company announced securing a 302.4 MW wind power project from Jindal Renewables, marking its second order from the renewable energy firm.

HDFC Life, HDFC Bank, Bajaj Finserv, NTPC, and Apollo Hospitals were the top gainers on the Nifty. Bharti Airtel, Cipla, Bajaj Auto, Tata Motors, and Adani Ports were the major laggards.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.