Closing bell: Sensex tanks 542 pts, Nifty ends at 25,062 as RIL, Trent, IT stocks weigh

Indian equity benchmarks closed significantly lower on Thursday, erasing previous session gains, as mixed corporate earnings overshadowed the optimism around the proposed India-U.K. free trade agreement. Adding to it, weakness in index heavyweights such as Reliance Industries (RIL), Trent, Bajaj FinServ, and IT major such as Infosys, Tech Mahindra, HCLTech weighed heavily on investor sentiment.

The BSE Sensex settled at 82,184.17, down 542.47 points or 0.66%, while the NSE Nifty50 ended at 25,062.10, slipping 157.80 points or 0.63%. The broader markets also witnessed selling pressure, with the Nifty MidCap 100 and the Nifty SmallCap 100 declined by 0.58% and 1.09%, respectively.

"Indian equities fell sharply today, reversing previous gains despite positive global cues. Initial optimism around the India-UK free trade agreement gave way to caution as attention shifted firmly to earnings" Vinod Nair, Head of Research, Geojit Investments.

He said that IT and FMCG sectors dragged down large-cap stocks due to subdued Q1 performance. “Though the Q1 earnings are broadly in line, it does not justify the premium valuation; India is trading at a 3-year high of 21x P/E.”

On the BSE Sensex pack, 24 out of 30 stocks ended in negative terrain, led by Trent, Tech Mahindra, RIL, HCL Tech, and Bajaj Finserv, falling in the range of 3.9% to 1.4%. On the other hand, Eternal (Zomato), Tata Motors, Sun Pharma, Tata Steel, Titan, and Power Grid were only gainers.

On the sectoral front, Nifty IT dropped 2.21%, followed by Nifty FMCG and Nifty Realty, which declined 1.12% and 1.04%, respectively. In contrast, Nifty PSU Bank gained 1.24%, and Nifty Pharma also ended in the green.

Among sectors, the IT index lost the most, falling 2.20%, followed by Nifty FMCG and Nifty Realty, which declined 1.12% and 1.04%, respectively. Despite weak market sentiment, Nifty PSU Bank gained over 1%.

Technically, the benchmark indices Nifty and Sensex once again faced resistance near 25,250 and 82,800, respectively, and reversed sharply. On daily charts, a bearish candle has formed, and on intraday charts, a lower top formation is evident, which is largely negative, said Shrikant Chouhan, Head Equity Research, Kotak Securities.

“We are of the view  that, although the intraday market texture appears weak, a fresh selloff is possible only after the levels of 25,000/82,000 are breached. Below these levels, the market could retest 24,900-24,835 / 81,700-81,500. Conversely, if the market moves above 25,125/83,200, a technical bounce back to 25,250/82,800 could occur. Further upside may continue, potentially lifting the market to 25,325/83,000,” he said.

Sudeep Shah, Head - Technical and Derivative Research, SBI Securities also opined that the Nifty has once again slipped below its 20-day EMA. “Going ahead, the zone of 24990-24970 will act as immediate support for the index. If the index slips below the 24970 level, then the next crucial support is placed in the zone of 24900-24870. On the upside, the zone of 25130-25150 will act as an immediate hurdle for the index.”

The banking benchmark index, Bank Nifty, opened with a minor gap-up but failed to hold early gains and slipped into negative territory. However, it found support near its 20-day EMA, which acted as a cushion. From there, the index staged a recovery of over 200 points, reflecting buying interest at lower levels and indicating that bulls are still defending key short-term support zones, Shah said.

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