Finally, after six consecutive record-breaking sessions, the Indian benchmarks, Sensex and Nifty, took a breather on September 27. Optimism driven by the US Fed's supersize rate cut and expectations of increased foreign inflows had kept the markets buoyant for six sessions, but a downturn in banking shares dampened the mood.
At close, the Sensex was down 264 points or 0.3 percent at 85,571 and the Nifty was down 40 points or 0.2 percent at 26,175. About 1,900 shares advanced, 1,878 shares declined, and 111 shares remained unchanged. Both Sensex and Nifty posted a 1.5 percent gain this week.
"A significant global market trend is the outperformance of China and Hong Kong this month on hopes that the Chinese stimulus will improve the Chinese economy and valuations in these markets where valuations are cheap now," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. "Therefore, it is possible that FIIs may again sell more in India to move money, particularly to the Hong Kong market."
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In the broader markets, the BSE Midcap gained 0.3 percent and the BSE Smallcap closed flat.
The Nifty Bank index fell by nearly a percent after two days of gains, with heavyweights Axis Bank, Kotak Mahindra, and HDFC Bank losing over 1 percent each. In contrast, sectoral indices like Nifty Healthcare, Pharma, Metals, and Energy posted gains of 0.8-1.3 percent.
"We've noticed leadership rotation across sectors, which is a typical sign of a bull market," said Kranthi Bathini Director of Equity Strategy, at WealthMills Securities. "Strong liquidity has been driving moves across sectors and this leadership rotation signals a healthy market," he told Moneycontrol.
Among Nifty 50 stocks, Kotak Mahindra, ICICI Bank, HDFC Bank, Bharti Airtel, and Power Grid were the biggest laggards, falling 1-3 percent while RIL, Coal India, Sun Pharma, Cipla, and BPCL topped the gainers' list with gains of 2-6 percent.
Looking ahead, the focus will be on the upcoming RBI policy decision, especially in light of rate cuts in the US and China. "While India's growth and inflation are currently stable, it will be important to see whether the RBI follows suit with a rate cut," said Ruchit Jain, Lead Research Analyst at 5paisa.
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