Equity benchmarks declined slightly on Tuesday following a volatile session coinciding with the monthly futures and options expiry. A late recovery in metal and PSU banking stocks helped mitigate the losses, while broader market consolidation continued as investors awaited the US Federal Reserve’s policy decision.
The BSE Sensex fell by 150.68 points, or 0.18%, closing at 84,628.16 after opening at 84,625.71, compared to the previous close of 84,778.84. The Nifty 50 slid 29.85 points, or 0.11%, to 25,936.20, having opened at 25,939.95 and ending lower than its previous close of 25,966.05. During the trading session, the indices fluctuated between gains and losses, with the Nifty dropping to an intraday low of 25,810 before experiencing a sharp recovery in the last hour.
Metal stocks emerged as the top gainers, with Tata Steel rising 2.82% to ₹181.65, up from ₹176.66, and JSW Steel also increasing by 2.82%, reaching ₹1,183.00 from ₹1,150.60. SBI Life grew by 1.62% to ₹1,934.00, up from ₹1,903.10, while Larsen & Toubro advanced 1.47% to ₹3,981.60 from ₹3,923.80. HDFC Life saw a 1.32% rise to ₹747.00 from ₹737.25.
Conversely, Bajaj Finserv declined by 1.48% to ₹2,138.10 from ₹2,170.20, and Trent fell by 1.37% to ₹4,733.00 from ₹4,798.70. Coal India dropped 1.31% to ₹391.50 from ₹396.70, Tech Mahindra slipped 1.13% to ₹1,446.30 from ₹1,462.80, and ONGC lost 1.10% to ₹250.49 from ₹253.27.
“Indian equities experienced a volatile expiry session but managed to close resiliently, with both the Nifty 50 and Bank Nifty showing significant recovery in the last thirty minutes of trading,” remarked Ponmudi R, CEO of Enrich Money. He noted that the Nifty 50 traded within a narrow range of 25,800–26,000 throughout the day, reflecting a cautious sentiment ahead of key global events like the US Federal Reserve’s policy announcement.
Sector performance varied significantly, with the Nifty Metal index rising by 1.23% and PSU Banks increasing by 1.21%. Conversely, Realty and IT indices saw declines exceeding 1%. The metal sector gained traction following China’s declaration to limit steel overcapacity and potential progress in US-China trade relations.
PSU Banks outperformed amid reports of the government considering a substantial increase in the foreign direct investment (FDI) limit in state-run banks from the current 20% to 49%. Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, noted, “We see strength in banking stocks, benefiting from a favorable credit cycle and strategic capital inflows.”
Market breadth remained negative, with 2,246 stocks declining compared to 1,910 advancing out of 4,332 stocks traded on the BSE. However, 160 stocks reached 52-week highs while 84 hit 52-week lows. Eleven stocks achieved their upper circuit limit, and nine reached their lower circuit limit.
“The domestic market remained volatile overall and ended flat, impacted by profit-taking during monthly expiry and weak global signals,” stated Vinod Nair, Head of Research at Geojit Investments. “Notably, buying interest resurfaced at lower levels, indicating underlying investor confidence.”
The Bank Nifty outperformed, closing at 58,270, up 156 points, successfully holding above the critical 58,000 mark. According to Ponmudi R, “The breakout zone between 58,000–58,250 acted as a strong support level, and as long as the index stays above this, momentum is likely to extend toward 58,800–59,000.”
Broader market indices were generally resilient, with the midcap index ending 0.02% lower, while the smallcap index recorded a modest 0.02% increase, suggesting selective participation rather than widespread selling.
Technical analysts maintained a positive outlook for the market’s near-term prospects. “The index could experience a solid rally as momentum builds above 26,000, with resistance seen at 26,300 and support at 25,850,” commented Rupak De, Senior Technical Analyst at LKP Securities.
Investors were closely monitoring the outcome of the US Federal Reserve’s policy meeting on Wednesday, with a 25 basis points rate cut widely anticipated. “Despite ongoing consolidation, we maintain a bullish outlook and recommend focusing on stock selection based on relative strength,” advised Ajit Mishra, SVP Research at Religare Broking.
Looking forward, markets are expected to remain strong amid positive global cues and the ongoing Q2 earnings season. Notable result announcements scheduled for Wednesday include those from L&T, Coal India, VBL, HPCL, CG Power, and Radico Khaitan.
