Sensex, Nifty edge marginally higher as FMCG, bank stocks help regain momentum; India VIX eases 4%

Technically, a decisive move above 24,700 could open the way toward 24,850 and 25,000, while immediate support is placed at 24,337, followed by the 200-day EMA at 24,260

Benchmark indices Nifty and Sensex edged into positive territory in the afternoon, lifted by strength in FMCG and banking stocks. Support also came from the broader market, with mid and smallcap indices rebounding to break their two- and five-day losing streaks.

At 12:25 am, the Sensex was up 116.25 points or 0.15 percent at 80,196.82, and the Nifty was up 35.30 points or 0.14 percent at 24,536.20. About 2146 shares advanced, 1312 shares declined, and 161 shares were unchanged.

"The August derivatives series closed on a weak note, with the Nifty slipping 1 percent and Bank Nifty tumbling 3.83 percent, marking a second straight monthly decline. As September kicks off, FIIs remain sharply bearish with a long-to-short ratio of just 0.09—its lowest since March 2023, reflecting 92 percent short positions. However, oversold indicators and heavy put writing at the 24,000–24,500 zone point to limited downside and raise the possibility of a pullback rally," Devarsh Vakil, Head of Prime Research at HDFC Securities, said.

At mid-day trade, sectoral action was mixed with the India VIX slipping 3.45 percent to 11.76. Gains were led by FMCG (up 1.01 percent), private banks (0.66 percent), media (0.74 percent), infrastructure (0.44 percent) and energy (0.43 percent). Midcap and smallcap indices also added 0.36 percent and 0.43 percent, respectively. On the other hand, autos, IT and realty edged lower, while metals and oil & gas traded largely flat. Bank Nifty was up 0.26 percent at 53,958.75.

During the afternoon, shares of textile and footwear companies were sharply higher in anticipation of benefits from the proposed GST rate rationalisation, which will be taken up by the GST Council next week. CNBC TV-18's report suggests that the Group of Ministers (GoM) on rate rationalisation may propose to the council to reduce GST on textile products such as glimped yarn, metallised yarn and rubber thread to 5 percent from the current 12 percent.

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Star performer of the week, however, is Ola Electric Mobility. Up 20 percent this week, a mix of policy triggers and company-specific developments fuelled the rally, with the highlight being the company’s Production Linked Incentive (PLI) certification for its Gen 3 scooter portfolio. Another sentiment booster has been the buzz around a possible GST cut on entry-level two-wheelers and EVs.

Brokerage UBS has come out with a bullish note on financials, where it has projected the profit pool of the sector to nearly double over five years, and has upgraded Kotak Mahindra Bank to a Buy from Neutral, with a target price of Rs 2450 per share. The stock rose over a percent to become one of the top gainers on the Nifty.

"Technically, a decisive move above 24,700 could open the way toward 24,850 and 25,000, while immediate support is placed at 24,337, followed by the 200-day EMA at 24,260—levels that may attract fresh long positions," Amruta Shinde of Choice Equity Broking said.

"Bank Nifty also extended its losing streak, closing lower for the fifth consecutive session. The index slipped below the crucial 54,000 mark, reinforcing bearish momentum. Key support levels are placed at 53,570 (200-day EMA) and 53,480, while resistance is seen in the 54,000–54,450 zone. A breakout above this resistance band could pave the way for a rebound toward the psychological 54,850 level," she added.

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Shriram Finance, Trent, Bharat Electronics, L&T, and ITC were the top gainers in the Nifty. Laggards on the index included M&M, Eternal, Infosys, Apollo Hospitals, NTPC and JSW Steel.