Sensex slips 200 pts, Nifty below 24,800 as FMCG, metal shares drag; mid, smallcap indices gain for 4th day

ITC, Bajaj Auto, Nestle, Apollo Hospitals, and JSW Steel were the major laggards on the index.

Benchmark indices Nifty and Sensex extended their decline for a second consecutive session on May 28, weighed down by sharp losses in auto and FMCG stocks, with ITC leading the slide. Amid the broader market weakness, mid and smallcap stocks stood out once again, defying the downtrend to notch their fourth straight day of gains and outperforming the headline indices for the second session in a row.

At 11:50 am, the Sensex was down 181.12 points or 0.22 percent at 81,370.51, and the Nifty was down 54.35 points or 0.22 percent at 24,771.85. About 1871 shares advanced, 1430 shares declined, and 132 shares remained unchanged.

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"Tariff-related issues and President Trump’s comments on a whole host of economic and non-economic issues would continue to weigh on markets. The MPC is almost certain to cut policy rates by 25 bp in the June 6th policy meeting. Therefore, rate-sensitive sectors will be in focus in the coming days," V K Vijayakumar of Geojit Investments Limited said.

NSE sectoral indices witnessed a mixed session on Wednesday. The Nifty FMCG index was the biggest drag, slipping 1.31 percent, followed by losses of 0.66 percent in auto and 0.61 percent in metal stocks. Consumer durables, private banks, and pharma also ended in the red. On the other hand, energy gained 0.48 percent, media rose 0.59 percent, and PSU banks added 0.47 percent.  The Nifty IT and realty indices posted modest gains, while the Nifty Bank index traded nearly flat. Market volatility remained stable, with the India VIX inching up 0.27 percent to 18.59.

The Nifty Midcap 100 and Smallcap 100 indices climbed 0.44 percent and 0.43 percent, respectively.

Small and midcap stocks bucked the trend and outperformed larger indices yesterday, and we expect this momentum to continue today, said Devarsh Vakil of Head of Prime Research at HDFC Securities. This is because a significant feature of the Q4 results season is the outperformance of the midcaps, which has helped reduce the high valuations of the segment.

Cigarette-to-FMCG conglomerate ITC Ltd's share slipped over 3 percent on May 28 after British American Tobacco Plc (BAT) sold a massive 32 crore shares or 2.57 percent of its stake in ITC worth Rs 13344 crore. This marks its second such sale, after selling a 3.5 percent stake through block deals for Rs 16,690 crore last year.

LIC shares extended gains to trade almost 7 percent higher even as it released a mixed Q4. Most brokerages maintained a bullish stance on the stock, citing improving margins and attractive valuations as key growth drivers in the near term. Analysts highlighted a higher contribution from non-participating (non-par) policies, which positively impacted LIC’s Value of New Business (VNB) margin in Q4. Management also sounded optimistic about a rebound in premium growth.

"Moreover, Nifty continues to trade within a defined range, with 25,100 acting as a stiff resistance and 24,450 as a strong support. While the broader trend remains positive, the short-term structure looks cautious, mainly due to intraday selling seen at higher levels and the formation of a double top on the hourly chart," Sameet Chavan of Angel One said. "As reiterated in our previous outlook, a decisive move above 25100 is crucial to reignite broad-based buying interest and negate the double top pattern. On the downside, the 20DEMA around 24,600 serves as immediate support, followed by the key support of matching lows around the 24,450 mark. A directional move is expected only once the index breaches the 24,450–25,100 range," he added.

Bharat Electronics, HDFC Life, Bharti Airtel, Bajaj Finance and Adani Ports were the top gainers on the Nifty. ITC, Bajaj Auto, Nestle, Apollo Hospitals, and JSW Steel were the major laggards on the index.