Sensex flat, Nifty steady on weekly expiry as broader markets bleed; Realty, IT, PSU Banks fall

Nifty settled in the red for the past three sessions.

Domestic benchmarks Nifty 50 and the 30-pack Sensex saw a choppy session on Thursday, June 19, managing to hover near the flatline in trade, despite heavy selling pressure seen across sectoral indices and the broader markets amid wide-spread geopolitical concerns.

At close, the Sensex was down 82.79 points or 0.10 percent at 81,361.87, and the Nifty was down 18.80 points or 0.08 percent at 24,793.25. About 928 shares advanced, 2,907 shares declined which indicated the market breadth was in favour of the bears, and 133 shares unchanged.

Among the sectoral indices, the auto pack was the sole gainers as reports suggested that India might look towards Australia for its supply of rare earth minerals. The Nifty PSU Bank, Nifty Metal, and Nifty Media indices were among the worst hit, sinking up to two percent in trade.

IT stocks tumbled sharply after global brokerage firms CLSA and Morgan Stanley continued to caution that overall discretionary spending remains weak due to the uncertain macroeconomic environment. CLSA observed that demand in many verticals, especially retail and auto, remains subdued.

Morgan Stanley echoed this sentiment, noting that deal pipelines and management commentary confirm limited discretionary spending and weak opportunities for vendor consolidation.

On the broader markets front, the Nifty Midcap 100 and Nifty Smallcap 100 indices sank over 1.5 percent, as investors rushed to exit their positions. Instead, they preferred the relative safety of large-cap, blue-chip stocks.

Overnight, the U.S. Federal Reserve decided to keep its benchmark lending rate unchanged at the 4.25-4.5 percent mark, given heightened economic uncertainty.

Subho Moulik, CEO at Appreciate said, “The Federal Reserve's decision to hold rates steady while projecting a 'stagflation lite' scenario of 1.4 percent growth and 3 percent inflation reveals a central bank navigating unprecedented uncertainty. With seven FOMC members wanting no cuts versus eight expecting two, the internal divisions mirror broader economic confusion."

However, on the domestic front, analysts said, "Since Indian market valuations remain a concern, sustained rally will happen only when we get indications of sustained earnings growth, which is some time away."

"The 24,500-25,000 range for the Nifty is likely to hold till news from the Israel-Iran conflict change for the better or for the worse. If news of deescalation of tensions break, Nifty will break out of the upper band of the range," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.