Sensex, Nifty end with minor losses; investors turn to defensives in a weak market

The volatility gauge, India VIX, rose nearly four percent to 14.5.

The Sensex and Nifty managed to recover from the day's lows, closing with minor losses on September 4. By the last hour of trade, five of the 13 major sectoral indices had rebounded. Investors gravitated toward defensive stocks, particularly the FMCG and pharma sectors, driving the Nifty FMCG and Nifty Pharma indices up by 0.4 and 0.7 percent, respectively. However, weakness in the banking and IT sector kept the benchmarks in red.

At close, the Sensex was down 202 points or 0.3 percent at 82,353 and the Nifty 50 was down 81 points at 25,198. About 1,852 shares advanced, 1,935 shares declined, and 90 shares were unchanged.

The downturn in Indian equity indices today followed a broader decline in global markets, fueled by concerns over a potential slowdown in the US economy. The Institute for Supply Management (ISM) report indicated that the US manufacturing PMI remained below the 50 threshold for the fifth consecutive month and this renewed recession concerns among investors.

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"This drop, exacerbated by concerns over a potential slowdown in the US economy, is significantly affecting investor sentiment," said Shrey Jain Founder and CEO of SAS Online.

IT and semiconductor stocks were in focus today. Nifty IT fell nearly one percent Indian IT companies earn a significant share of their revenues from the US. The Nifty IT index was dragged down by Wipro, Infosys, and TCS. Wipro declined over 3 percent, emerging as the worst-hit stock on Nifty 50. Coal India shares dropped over 3 percent, becoming the second-worst performer on the Nifty 50, following a target price downgrade by brokerage firm Nuvama.

Shares of semiconductor stocks - RIR Power Electronics, ASM Technologies, and SPEL Semiconductor - also tumbled after global semiconductor giant Nvidia Corp's share price fell over 9 percent overnight. ONGC, Hindalco, and M&M were some of the other losers on Nifty 50.

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On a positive note, Asian Paints and Grasim Industries emerged as the top gainers on the Nifty 50, rising by 2.4 percent and 2 percent, respectively. The decline in Brent crude oil prices is anticipated to reduce input costs for these companies, providing them with greater flexibility to expand margins. HUL, Apollo, and Sun Pharma also rose 1.2-1.7 percent.

Coming to the broader market, V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, "In the present stage of the market where there is no valuation comfort in the broader market, quality largecaps offer safety to long-term investors." The broader market exhibited a mixed trend. While the BSE midcap index declined by 0.4 percent, the smallcap index edged up by 0.2 percent.

The volatility gauge, India VIX, rose nearly four percent to 14.5.

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