Sensex, Nifty downtrend continues; mid, smallcaps extend gains for 2nd day

Indian equity market continued its losing streak on the weekly expiry day, with the BSE benchmark Sensex and NSE Nifty50 settling marginal lower in range-bound trade. The BSE Sensex shed 203 points, or 0.27%, to close at 75,736, and the Nifty50 slipped 19.75 points, or 0.09%, to 22,913.15 levels. The market capitalisation of BSE-listed companies stood at ₹404.87 lakh crore at the end of the day’s trade. The market sentiments were dented by concerns over potential U.S. tariffs on Indian goods as well as U.S. Fed minutes indicating that an interest rate cut may be delayed. Markets await the RBI meeting minutes on Friday for further direction.

Bucking the trend, broader market extended their gaining streak for the second straight session amid value buying after recent correction. The S&P BSE midcap index ended 1.25% higher after adding 1.3% in the previous session. The BSE smallcap index outperformed both benchmark and midcap indices, gaining 1.4% today after climbing 2.4% on Wednesday.

"Domestic equity indices experienced minor losses as rising concerns over potential U.S. tariffs on Indian goods led to capital outflows. Additionally, the proposed trade policy is expected to exert inflationary pressures, with the latest Fed Minutes indicating that an interest rate cut may be delayed. However, the broader market showed an initial recovery, supported by expectations of improving consumption from Q1FY26, driven by moderating domestic inflation and the recent RBI rate cut," said Vinod Nair, Head of Research, Geojit Financial Services.

Top gainers and losers

On the BSE Sensex pack, 17 out of 13 stocks ended in negative terrain, led by HDFC Bank, Maruti Suzuki India, Tech Mahindra, HCL Tech, and ITC, falling between 1-2.3%.

On the other hand, NTPC, Mahindra & Mahindra, Adani Ports, Tata Steel, and Tata Motors were among top gainers. NTPC topped the chart with a 3.3% gain, followed by M&M, which added 3%.  

On the sectoral front, auto, metal, oil & gas, media, power, realty, and PSU Bank were top performers, rising in the range of 1-2%. The IT and pharma space emerged as laggards.

The market breadth, indicating the overall strength of the market was positive, with 2,668 out of 4,053 traded stocks advancing, while 1,273 declined, and 111 remained unchanged. As per the BSE data, 14 stocks hit their upper circuit limit, while 4 were locked in their lower circuit limit.

Analysts recommend buy-on-dips strategy approach

Amidst ongoing correction in the market, analysts have suggested investors to adopt a stock-specific approach and follow buy-on-dips strategy.

“In the current scenario, a cautious stance on the index is recommended, with close attention to banking and IT for potential signals. Meanwhile, select pockets across various sectors, except FMCG, are showing notable traction. Traders should prioritise identifying quality stocks while refraining from aggressive positions,” said Ajit Mishra – SVP, Research, Religare Broking Ltd.

Technically, on the daily chart, Nifty has formed a bullish Marubuzo candlestick pattern, indicating strength. Additionally, the Nifty Smallcap 100 index extended gains after forming a bullish engulfing pattern, while the Nifty Midcap 100 index also formed a bullish candle, reinforcing positive sentiment, said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates.

“Given this broader market strength, a buy-on-dips strategy remains favorable as long as Nifty holds above its recent low of 22,725. The 21-Day Simple Moving Average (DSMA) at 23,210 serves as an immediate hurdle, and a decisive move above this level could trigger fresh bullish momentum,” he added.

Over the past few days, Nifty has been trading within a broad range of 22,700–23,050. “During this consolidation phase, dips toward 22,800–22,700 should be viewed as buying opportunities. A breakout above 23,050 would pave the way for further upside, towards the 20-day EMA placed around 23,200 levels,” Bajaj Broking said in a note.

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