Sensex, Nifty flat after four-day rally; analysts expect range-bound action

Leading the decline were IT, FMCG, and energy stocks, while metals continued their upward momentum, buoyed by China's recent stimulus measures aimed at reviving its economy.

Indian benchmarks, Sensex and Nifty 50, opened lower on September 25, taking a breather after hitting record highs for four consecutive sessions. Mixed global cues also added to the subdued start.

At 9.30 AM, the Sensex was down 4 points or 0.01 percent at 84,909 and the Nifty was down 0.4 points at 25,940. About 1,730 shares advanced, 1,115 shares declined, and 108 shares remained unchanged.

Leading the decline were IT, FMCG, and energy stocks, while metals continued their upward momentum, buoyed by China's recent stimulus measures aimed at reviving its economy. Vedanta, Hindalco, and Tata Steel climbed between 0.7 and 3 percent, boosting the metal index by over 1 percent.

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Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities said, "One may expect further rangebound action or minor dip in the next 1-2 sessions."

Rupak De, Senior Technical Analyst at LKP Securities, echoed this sentiment, stating that while the short-term outlook remains positive, a decisive break above 26,000 is needed to extend the rally. "Until then, we expect range-bound movement, with the index fluctuating between 25,800 and 26,000 over the next few hours to a few days."

In the broader market, the BSE Midcap index slipped 0.2 percent, while the BSE Smallcap remained flat.

Among sectoral indices, Nifty IT and FMCG declined more than half a percent. Infosys, Tech Mahindra, and HCLTech were the biggest drags on the IT index, falling between 0.6 and 1.4 percent. Nifty FMCG continued its downward trend from the previous session, with Dabur and HUL sliding 1.5 percent and 0.5 percent, respectively.

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Aditya Gaggar, Director at Progressive Shares, highlighted the indecision between bulls and bears. "A strong move above 26,000 will open doors for 26,100 while on the lower side, the zone of 25,800-25,850 will serve as a strong support area," he said.

Among individual stocks, Eicher Motors, HDFC Bank, Hindalco, M&M, and Power Grid led the gains on Nifty 50, rising between 1-3 percent. On the downside, Asian Paints, Britannia, Tech Mahindra, LTIMindtree, and Tata Consumer Products were the biggest laggards, slipping between 0.7-1.3 percent.

Overnight in the US, the S&P 500 and Dow Jones Industrial Average ended at record highs shrugging off weak consumer confidence data, as mining stocks surged following China's announcement of a stimulus package. Meanwhile, Asia-Pacific markets saw mixed performance, though Hong Kong's Hang Seng index jumped over 2 percent on the back of China’s stimulus package.

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