Indian equity markets retreated on Thursday, with the Sensex and Nifty ending in the red as investors adopted a cautious stance ahead of the release of crucial domestic inflation data. While the FMCG and banking sectors weighed on the benchmark indices, the IT sector bucked the trend, fueled by optimism surrounding a potential rate cut by the US Federal Reserve. This mixed performance reflects a market grappling with uncertainty as it awaits key economic indicators that could influence future monetary policy decisions.
Market performance:
The S&P BSE Sensex shed 236.18 points to close at 81,289.96, while the Nifty50 declined 93.10 points to end at 24,548.70. This downward movement was primarily attributed to profit booking in the broader market, with midcap and smallcap indices correcting by 0.46% and 0.97%, respectively.
Sectoral performance:
IT Sector Shines: The IT sector emerged as a bright spot, with the Nifty IT index hitting a fresh high on hopes of a rate cut by the US Federal Reserve following favorable US inflation data.
FMCG and Banking Drag: FMCG and banking stocks were the major laggards, contributing significantly to the decline in the benchmark indices.
Mixed Performance in Other Sectors: While the metal sector also showed some strength, other sectors ended the day in the red, reflecting a cautious market sentiment.
Key market movers:
Gainers: Adani Enterprises, Bharti Airtel, IndusInd Bank, and Tech Mahindra were among the top gainers on the Nifty.
Losers: NTPC, Hindustan Unilever, Coal India, Hero MotoCorp, and BPCL were among the top losers.
Analysts suggest that the market is likely to remain range-bound until the release of India's CPI inflation data. Positive inflation figures could raise expectations for rate cuts by the Reserve Bank of India (RBI) in February, potentially boosting market sentiment. However, concerns about rising vegetable prices and their impact on the inflation trajectory persist.
The Indian stock market's performance reflects a cautious approach by investors as they await key domestic inflation data and assess its potential impact on future monetary policy decisions. While the IT sector's resilience offers some optimism, weakness in FMCG and banking stocks underscores the underlying uncertainty. The upcoming inflation figures and the RBI's subsequent actions will be crucial in shaping market direction in the near term. Investors are likely to remain watchful, seeking clarity on the inflation trajectory and its implications for interest rates before making significant investment decisions.
DISCLIMER: Prameya or Prameya News7 does not endorse the views or recommendations expressed by experts/brokerages in this article. These are solely their opinions. Readers are advised to consult with a qualified financial advisor before making any investment or trading choices.
