Closing Bell: Sensex, Nifty End Slightly Lower; Realty & PSU Banks Gain, FMCG Drags

Indian equity indices ended the day slightly lower, with the Nifty closing at 25,356.50 and the Sensex at 82,890.94. The Sensex fell by 71.77 points, or 0.09%, while the Nifty declined by 32.40 points, or 0.13%

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Shrikant Chouhan, Head of Equity Research at Kotak Securities, noted that despite the minor daily decline, the equity markets had a robust week. Both the Nifty-50 and Sensex-30 indices saw gains of approximately 2% over the week. Most sectoral indices performed well, except for the BSE Energy and BSE Oil & Gas indices, which ended lower. Global sentiment was positive, bolstered by favorable US macroeconomic data that alleviated inflation concerns, even though labor data was somewhat disappointing. The recent drop in global oil prices, driven by concerns over demand, is expected to benefit the Indian economy. 

India’s Consumer Price Index (CPI) for August 2024 remained steady at 3.7%. This stability, along with positive global economic conditions, is likely to offer the Reserve Bank of India (RBI) more flexibility in its monetary policy. In Europe, the European Central Bank (ECB) reduced its deposit rate by 25 basis points to 3.50%. Market attention will now shift to the upcoming US Federal Reserve meeting, with expectations for potential monetary easing.

Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas, observed that while the Nifty opened positively, it consolidated throughout the day and closed marginally lower by about 32 points. The recent sharp rise in the index was followed by a consolidation phase, which is expected to continue. The bullish undertone suggests a potential upward movement once this phase concludes, with targets set at 25,500 to 25,700. Support levels are seen at 25,200 to 25,150.

Bank Nifty showed strength, breaking above previous highs and closing up by 166 points. The positive momentum is supported by daily and hourly indicators. The 52,000 level acts as a significant resistance, and a breakthrough could lead to a rally towards 52,500 to 52,600. Support is noted between 51,500 and 51,400.

Prashanth Tapse, Senior VP (Research) at Mehta Equities, commented that after a sharp decline in early trades, the indices recovered most of their losses to end marginally lower. The market saw selective profit-taking, particularly in power, oil & gas, and FMCG sectors. With markets being mostly range-bound after Thursday’s surge, investors are likely to adopt a wait-and-watch approach ahead of next week’s Federal Reserve policy meeting.

Rupak De, Senior Technical Analyst at LKP Securities, reported that the index remained within a range throughout the day. It faced resistance at the rising trendline on the daily chart. On lower timeframes, a bearish crossover in the RSI indicates a potential bearish momentum reversal. The trend is expected to be sideways in the near term, with support at 25,150 to 25,200 and resistance at 25,460.

Ajit Mishra, SVP of Research at Religare Broking, noted that trading was lackluster on Friday, with markets ending slightly lower after a strong upward movement. The Nifty fluctuated within a narrow range and closed at 25,344. Sectoral performance was mixed: realty and metals showed solid gains, while FMCG and energy sectors declined. Broader indices outperformed the benchmark, rising by over 0.5%. The recovery in US markets and recent foreign inflows are driving positive movement. The recommendation is to accumulate high-quality large-cap and mid-cap stocks on any interim dips.

Sensex Today: Reserve Bank of India (RBI) Governor Shaktikanta Das highlighted India’s growth potential, stating it could be around 7.5% or more, slightly above the RBI's forecast of 7.2% for 2024. Das attributed slower growth in the first quarter to reduced government expenditure during the national elections.