Sensex and Nifty took a breather, closing flat on September 13 after the sharp gains of the previous session wherein both indices hit new record highs. While FMCG and energy stocks exerted downward pressure on the Nifty, gains in banking and IT stocks helped limit the losses.
At close, the Sensex was down 71 points or 0.09 percent at 82,890 and the Nifty was down 32 points or 0.1 percent at 25,356. About 2,363 shares advanced, 1,431 shares declined, and 102 shares remained unchanged. Both Nifty 50 and Sensex gained over 2 percent this week.
"The markets saw lackluster trading today, ending slightly lower as they took a breather following a strong surge," said Ajit Mishra, SVP of Research at Religare Broking. He said that Nifty opened flat and fluctuated within a narrow range throughout the session, managing to retain its 25,350 level at close, for the second session.
The broader market showed resilience, with the BSE Midcap gaining 0.5 percent and the BSE Smallcap rising nearly 1 percent. The Nifty Midcap 100 index crossed 60,000 for the first time and hit an intraday high of 60,189.
Meanwhile, India VIX, a gauge of market volatility, eased by 5 percent to 12.5.
Although pharma stocks recovered from earlier losses, FMCG continued to face selling pressure, weighed down by ITC, HUL, and Godrej Consumer Products. Nifty Energy and Nifty Infra were also down by half a percent.
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In a sluggish market, PSU banks, metals, and IT stocks stood out. Nifty Realty, Nifty Media, and Nifty PSU Bank indices rose 1-2 percent.
Vaibhav Porwal, Co-founder of Dezerv pointed out some key considerations for investors. He said that from the pandemic lows up to the 2024 Lok Sabha elections, value and momentum factors were dominant, but post-election, 'quality' is resurging.
With an extended period of high interest rates expected to conclude next week, it's important to note that many low-quality stocks have experienced significant rallies, leading to inflated valuations reminiscent of previous market peaks, Porwal said. He advised investors to reassess their portfolios, identify underperforming assets, and consider reallocating towards high-quality companies with solid fundamentals.
Metal stocks continued their upward momentum from the previous session, bolstered by expectations of a potential rate cut on mortgages in China aimed at boosting domestic consumption. Additionally, the Indian government's decision to extend anti-dumping duties on select steel imports from China and Vietnam further supported the sector. The metal index, Nifty Metal was up 0.9 percent led by gains in Vedanta, Tata Steel, and Jindal Steel.
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High volumes and positive updates from Wipro's CEO Srini Pallia drove Wipro shares up nearly 4 percent, which in turn pushed the Nifty IT index to a new high.
The Nasdaq Composite's 1 percent surge overnight and growing expectations of a 25 basis point rate cut by the US Federal Reserve in the upcoming September 17-18 FOMC meeting provided further support to IT companies, which rely heavily on the US for their revenues.
Axis Bank, IndusInd Bank, Bajaj Finserv, Bajaj Finance, and Wipro rose 1-4 percent, emerging as the top gainers on Nifty 50 index.
On the other hand, Coal India, ITC, HDFC Life, Adani Ports, and SBI Life's shares fell 1-2 percent, becoming the worst-hit stocks on the index.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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