Sensex and Nifty close flat as gains are offset by energy and consumer companies

The Indian stock market indices ended nearly unchanged on Tuesday, with minor gains in some sectors balancing out losses in others. The S&P BSE Sensex added a modest 13.65 points to close at 81,711.76, while the NSE Nifty50 edged up by just 7.15 points, ending at 25,017.75. The flat performance came as the global rally, spurred by expectations of a potential rate cut by the U.S. Federal Reserve in September, took a pause. 

The trading session reflected an indecisive market sentiment, as seen in the Nifty closing with a Doji pattern on the daily chart, a technical indicator suggesting uncertainty among investors. Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd., noted that the weak cues from U.S. markets and subdued Asian indices led to profit-booking towards the end of the day, signaling continued intraday volatility amid growing geopolitical tensions and concerns over global economic growth.

Vinod Nair, Head of Research at Geojit Financial Services, observed that despite the ongoing positive expectations of a Fed rate cut, the recent geopolitical tensions and rising crude oil prices have made investors more cautious. As a result, while IT and financial stocks performed well, FMCG and metal stocks faced declines. Nair added that the recent shift in foreign institutional investors' (FII) stance towards the domestic market and the anticipation that the Reserve Bank of India (RBI) may align with the Fed’s actions could foster a positive outlook in the near term.

One of the day's significant market movers was Zee Entertainment Enterprises Ltd., whose shares surged by as much as 15% before settling 11.49% higher at Rs 150.90 on the BSE. The surge followed the company's announcement of a settlement agreement with Culver Max Entertainment Private Limited (formerly Sony India) and Bangla Entertainment Private Limited, resolving all disputes between the parties.

In terms of individual stock performance on the Nifty 50, Larsen & Toubro led the gainers, rising by 1.48%, followed by Cipla with a 1.45% increase. Infosys, HCLTech, and Sun Pharma also saw gains, rising by 1.14%, 0.96%, and 0.71% respectively. On the losing side, BPCL was the top decliner, dropping by 1.68%, with JSW Steel, Eicher Motors, Grasim Industries, and Kotak Mahindra Bank also seeing declines.

The Nifty Smallcap100 index outperformed, rising by 1.05%, while the Nifty Midcap100 index posted a 0.49% gain, indicating continued investor interest in medium-sized firms. Meanwhile, the India VIX, the market's fear gauge, saw a notable decline of 1.17%, reflecting a slight easing of market volatility.

Senior Technical Analyst Rupak De of LKP Securities commented that the Nifty's technical setup, with significant call and put option activity at the 25,000 strike price, suggests that the index may remain range-bound or experience a slight dip in the near term. He identified 24,800 as immediate support on the downside, with a potential rise above 25,100 possibly pushing the Nifty towards 25,300.

Overall, the market's cautious tone reflects the balancing act between domestic factors and global uncertainties, with investors keeping a close watch on geopolitical developments and economic indicators.