Benchmark stock market indices ended lower on Friday after a highly volatile trading session, capping off the week on a weaker note. The session witnessed significant fluctuations, with the market struggling to find a clear direction amid mixed global cues and investor reactions to the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) review meeting. While stocks in the metal and auto sectors displayed resilience and posted gains, weakness in FMCG, public banking, and the energy sector ultimately dragged down the overall indices, leading to a negative close.
The S&P BSE Sensex dropped by 197.97 points, or 0.25%, to settle at 77,860.19, while the broader NSE Nifty50 declined by 43.40 points, or 0.18%, to close at 23,559.95. Throughout the session, market participants remained on edge, closely analyzing the MPC’s decision to cut the repo rate by 25 basis points to 6.25%. The rate cut was widely anticipated, but the central bank's cautious stance on inflation and economic growth kept investors wary.
Market analysts noted that despite the rate cut, concerns over persistent inflationary pressures, geopolitical uncertainties, and global economic headwinds prevented a strong rally. During the early part of the session, indices witnessed sharp swings in both directions, with traders reacting swiftly to macroeconomic developments. However, the absence of a clear catalyst for sustained bullish momentum resulted in a lackluster closing.
In sectoral performance, the metals sector emerged as a standout performer, buoyed by expectations of strong demand and firm commodity prices. Tata Steel led the pack, rallying 4.24% as investors bet on improved profitability in the upcoming quarters. Indian Hotels Company also gained significantly, rising 3.73%, as positive sentiment surrounded the hospitality sector, driven by increased travel and tourism activities.
Bharti Airtel witnessed a strong upmove, advancing 3.60% amid optimism over its expansion plans and sustained growth in data consumption. JSW Steel continued its upward trajectory, climbing 3.35%, supported by favorable industry trends and rising global steel prices. Retail major Trent Limited also attracted buying interest, ending 3.09% higher on expectations of robust consumer demand in the upcoming festive season.
Conversely, the FMCG sector weighed heavily on the indices, with ITC leading the decline, slipping 2.49% due to concerns over weaker rural demand and margin pressures. State Bank of India (SBI), the country’s largest public sector bank, fell 2.11%, reflecting weakness in the broader banking space. Consumer goods giant Britannia Industries also struggled, declining 1.70%, as concerns over input cost inflation persisted.
Adani Ports and Special Economic Zone saw a 1.59% drop, as investors booked profits amid uncertainties surrounding trade and logistics operations. IT heavyweight Tata Consultancy Services (TCS) shed 1.24%, with profit booking seen after recent gains in the IT sector.
Market experts noted that with key macroeconomic events, including the MPC meeting, now concluded, investors will shift their focus back to corporate earnings and global market trends for further cues. Technically, Nifty managed to hold its crucial short-term support at the 20-day exponential moving average (DEMA), which will be a critical level to monitor in the coming sessions. A sustained move above this level could pave the way for a recovery towards the 23,900 mark. However, if the index fails to hold its support, sideways consolidation or further downside cannot be ruled out.
Looking ahead, traders are advised to adopt a stock-specific approach, given the prevailing market volatility. Analysts suggest maintaining a cautious stance, with a strong emphasis on risk management and portfolio diversification. As the earnings season progresses, investor sentiment will be largely shaped by corporate performance and management commentary, which could determine the market's near-term direction.
Global factors, including movements in crude oil prices, the US Federal Reserve's stance on interest rates, and geopolitical developments, will also play a crucial role in influencing domestic market trends. Investors will be keeping a close watch on any fresh economic data releases that could impact market sentiment, particularly inflation figures and industrial output data.
