Sensex, Nifty trade flat as IT, PSU bank, metal stocks drag; small, midcaps down 1%

Laggards on the index included Asian Paints, ONGC, Bajaj Finserv, Hindustan Unilever, and Sun Pharma.

Markets struggled for direction on June 19, with benchmark indices Nifty and Sensex slipping lower as sharp losses in IT and PSU bank stocks weighed on sentiment. Despite a modest push from auto stocks—the day’s only sectoral bright spot—the broader mood remained cautious. Midcap and smallcap indices followed suit, slipping lower and reflecting the underlying weakness across the board.

At 12:15 pm, the Sensex was down 15.61 points or 0.02 percent at 81,429.05, and the Nifty was down 0.30 points or 0.00 percent at 24,811.75. About 919 shares advanced, 2400 shares declined, and 117 shares were unchanged.

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"While the rate cut was priced in, the Fed’s projections of slightly higher inflation and slower GDP growth did inject a cautious undertone. While the Fed has indicated a potential for two rate cuts later this year, possibly totalling 50 basis points, it won’t materialise before September and will be heavily data-dependent, especially on inflation," Aishvarya Dadheech, Founder and CIO of Fident Asset Management, said.

He added that current volatility has more to do with the conflict in the Middle East and suggests that if the resolution is achieved, market sentiment should hold up.

Also read: Mutual funds lead DIIs as June equity inflow stays strong in follow up to May

Sectoral indices on the NSE were largely in the red during Thursday’s session, reflecting broad-based weakness across the market. The India VIX slipped 1.89 percent to 14.01, suggesting subdued volatility despite choppy trade. Nifty Auto was among the few gainers, up 0.47 percent, while Nifty Infra held flat with a marginal 0.02 percent uptick. On the losing side, Nifty IT dropped 1.10 percent, PSU Bank fell 1.87 percent, and Smallcap 100 slipped 1.20 percent. Nifty Media, Metal, and Midcap 100 also remained under pressure, each down nearly 1 percent. FMCG, Energy, Pharma, and Realty indices were mildly lower.

For the broader markets, Dadheech said that a revival in mutual fund flows towards mid and small-cap stocks, despite a 55 percent drop in large-cap flows. Fund managers who had been sitting on cash earlier are now returning to the market, indicating renewed conviction in broader market opportunities.

Read more: India VIX falls under 14, signals easing market sentiment despite geopolitical uncertainties

IT stocks fell up to 3 percent after global brokerage firms CLSA and Morgan Stanley continued to caution that overall discretionary spending remains weak due to the uncertain macroeconomic environment. CLSA observed that demand in many verticals—especially retail and auto—remains subdued. Morgan Stanley echoed this sentiment, noting that deal pipelines and management commentary confirm limited discretionary spending and weak opportunities for vendor consolidation.

As for individual stocks, shares of ESAF Small Finance Bank surged 11 percent after the bank’s board approved the sale of non-performing assets (NPAs) and technically written-off loans worth Rs 735.18 crore to an asset reconstruction company (ARC). The loan pool includes Rs 362.43 crore in NPAs and Rs 372.75 crore in technically written-off accounts. The bank stated that it has already made provisions covering 90.15 percent of the total loan pool.

Swiggy shares gained over 4 percent,  rising for the second straight session on June 19 after IIFL Securities initiated coverage on the stock with a ‘buy’ rating and a target price of Rs 535, implying a potential upside of nearly 40 percent from current levels. IIFL noted that while Swiggy lags behind Zomato in food delivery and Blinkit in quick commerce, it expects the company to clock a 28 percent revenue CAGR from FY25 to FY28 and turn EBITDA-positive by FY27, with profitability expected by FY28.

"Early gains in the session raised hopes but lacked follow-through, with momentum fading as the day progressed. Only 27 percent and 20 percent of Nifty 500 stocks managed to close above their 10- and 20-day SMAs, respectively — the weakest reading in four sessions, reinforcing a bearish undertone," Anand James of Geojit Investments Limited said. "Heading into the day, dips towards the 24,720–24,690 zone are likely, but a sharp fall to 24,060 appears unlikely for now. As highlighted earlier, the 24,500 region is expected to offer support, while any upward moves will be closely watched for signs of recovery," he added.

Eicher Motors, Tata Consumer Products, M&M, Dr Reddy's, Titan, and Eternal were the top gainers on the Nifty. Laggards on the index included Asian Paints, ONGC, Bajaj Finserv, Hindustan Unilever, and Sun Pharma.

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