Sensex ends flat, Nifty below 23,700 as PSU banks, metal dampen mood; IT lone bright spot

IndusInd Bank, Dr Reddy's, Coal India, Adani Enterprises and Adani Ports were the top laggards on the index.

Benchmark indices Nifty and Sensex saw a subdued session on March 25, as sharp declines in metal, PSU bank, and oil & gas stocks offset gains. Profit booking further weighed on sentiment, but a resilient IT sector, the sole gainer, helped markets inch higher. With this, the indices managed to extend their winning streak to a seventh straight session.

The broader market also showcased weak trends, with the Nifty Midcap 100 and Smallcap 100 slipping 1.1 and 1.5 percent, respectively. "We're cautious on this space since valuation concerns persist," Ajit Mishra, Senior Vice President at Religare Broking said in a conversation with Moneycontrol.  Historically, mid and small-cap stocks are still trading at a premium compared to their 10-year averages and the upcoming earnings season will provide better clarity on their trajectory.

At close, the Sensex was up 32.81 points or 0.04 percent at 78,017.19, and the Nifty was up 10.30 points or 0.04 percent at 23,668.65. About 1019 shares advanced, 2868 shares declined, and 107 shares unchanged.

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"Today's market performance can be viewed as a healthy consolidation after a strong six-day rally ahead of the monthly expiry," Mishra said. He added that the recent surge stems from renewed buying interest by Foreign Institutional Investors (FIIs) and significantly covering their short positions in the derivatives segment.

12 out of 13 indices traded lower. Nifty IT emerged as the sole gainer, rising over 1 percent, driven by gains in Infosys, TCS, HCL Tech, and Wipro. Nifty Bank, which added 0.4 percent during mid-day, also slipped into the red. Furthermore, Nifty Pharma, Metal, Oil and Gas and PSU Bank were the biggest laggards, crashing over a percen each, slipping almost 1 percent. Nifty Auto, Consumer Durables, and Realty fell up to a percent each.

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Mishra remains bullish on banking and financials, given their strong performance during the recent rebound and expectations of continued strength in earnings. However, he is cautious about IT and pharma due to potential tariff risks in these sectors. Additionally, concerns over a slow recovery in consumption keep him selectively wary of FMCG stocks.

Trouble continued for IndusInd Bank as shares slipped another 5 percent after it said that GST authorities in Maharashtra’s Thane district have imposed a penalty of over Rs 30.15 crore for ‘various’ issues, against which the bank may file an appeal. The lender said the penalty imposed by Thane's Joint Commissioner of CGST & Central Excise pertains to ‘various GST issues’, without revealing further details.

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UltraTech Cement shares surged over 3 percent in today’s session after UBS upgraded the stock to ‘buy’, citing an improving outlook for the cement sector. The global brokerage expects demand to rebound strongly in the upcoming fiscal year, marking the end of a rough patch that saw soft demand, falling prices, and sluggish volume growth.

Zomato shares slipped nearly 6 percent after Macquarie preferred the restaurant franchise space over food delivery, citing a recovery in discretionary spending as a key driver. While food delivery growth is supported by new user additions and stable unit economics, the brokerage remains cautious on Zomato. Instead, it favours Devyani International and Westlife Foodworld for their stronger positioning in the segment.

"From a technical standpoint, the 23,500 zone, followed by the 89 DEMA coinciding with the recent bullish gap of 23,433-23,400, is likely to cushion any shortcomings in the near period," Sameet Chavan of Angel Onse said. "On the flip side, the swing high of Feb’25 around 23,800 seems the intermediate potent resistance, followed by 24,100 (200 DSMA) in the comparable period. Looking ahead, we have a promising opportunity to capitalize on the significant shifts in market trends alongside the strong momentum as we approach the monthly expiry," he added.

UltraTech Cement, Trent, Bajaj Finserv, Grasim, and Infosys were the top gainers on the Nifty. IndusInd Bank, Dr Reddy's, Coal India, Adani Enterprises and Adani Ports were the top laggards on the index.

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