Nifty, Sensex Close Lower as Banking Stocks Drag; Midcaps Shine

The Nifty 50 index settled at 24,032.80 points down 0.36 per cent or 86.50 points and the BSE Sensex closed 0.33 per cent lower at 77,017.79 points, down 251.61 points.

The broader market continued to show resilience, outperforming the benchmark indices. Both the Nifty Midcap 100 and Nifty Smallcap 100 closed in the green, reflecting sustained buying interest in mid and small-cap stocks, according to Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities.

Shah added in a note that market breadth remained stable, with the Advance/Decline ratio staying flat and 240 stocks from the Nifty 500 universe ending the session on a positive note.

Sector-wise, performance was mixed. Nifty Auto and Nifty FMCG were the top sectoral gainers, supported by selective buying in consumer and automobile stocks. On the other hand, Nifty Realty and Nifty Consumer Durable indices ended on a weaker note, weighing on overall sentiment. Within the Nifty pack, M&M and UltraTech Cement emerged as the top gainers, while Jio Financial and ICICI Bank were among the top laggards, dragging the financial sector lower.

The banking benchmark Bank Nifty continued to underperform, ending 0.60% lower. The sustained underperformance of banking stocks weighed on overall market momentum, with the sector showing relative weakness compared to the broader market.

Global sentiment remained cautious through the day. Stocks in Asia slid on Tuesday as geopolitical tensions between the US and Iran weighed on investor confidence, even as both sides continue to work towards a truce while trading blows over the Strait of Hormuz. Oil prices eased slightly but remained well above USD 100 a barrel, adding to concerns over inflation and input costs for domestic companies.

Wall Street futures also indicated a subdued opening, with Nasdaq futures and S&P 500 futures edging down about 0.1% each. European markets mirrored the cautious tone, as EUROSTOXX 50 futures lost 0.2% and FTSE futures fell 0.75% ahead of their open.

On the domestic front, the market's resilience was evident in the performance of the broader indices, even as the benchmark remained range-bound. The steady performance of mid and small-cap stocks suggests that investors are selectively positioning in segments with relatively better earnings visibility and growth potential, despite the lack of a clear directional move in the headline indices.

With global cues mixed and domestic earnings season largely behind, market participants are likely to continue focusing on stock-specific developments and sectoral themes.

- ANI