Equity Markets Retreat Despite New Highs; Banking Sector Leads Decline

Indian equity markets experienced a downturn on Friday, with profit-taking pushing indices lower after hitting new record highs earlier in the session.

The Sensex and Nifty both reached unprecedented levels intraday, with the Sensex touching 85,978 and the Nifty hitting 26,277.

However, at the close, the Sensex fell by 264 points, or 0.31%, ending the day at 85,571. The Nifty, meanwhile, dropped 37 points, or 0.14%, to close at 26,178.

The decline was primarily driven by a slump in banking stocks.

The Nifty Bank index saw a significant drop of 541 points, or 1%, closing at 53,834.

This sectoral weakness contributed to the overall market pullback.

Among the Sensex constituents, Sun Pharma, Reliance Industries, Titan, and HCL Technologies emerged as notable gainers. Conversely, stocks such as Power Grid, ICICI Bank, and Bharti Airtel were among the top decliners.

Midcap and smallcap stocks also saw a decrease. The Nifty Midcap 100 index fell by 88 points, or 0.15%, to finish at 60,381, while the Nifty Smallcap 100 index ended at 19,242, down 19 points, or 0.10%.

Sectoral performance varied, with gains in Auto, IT, PSU Banks, Pharmaceuticals, Metals, and Energy sectors. In contrast, Financial Services, FMCG, Realty, Media, and Private Banks struggled, contributing to the market’s overall retreat.

Rupak De, Senior Technical Analyst at LKP Securities, commented, “The Nifty took a breather after a few days of continuous gains. The sentiment remains strong as the index continues to stay above important moving averages. This strength is likely to persist as long as it remains above 25,900.”

De further asserted, “On the higher end, a fresh round of rally may begin above 26,300. If the Nifty moves above 26,300, it could potentially rise towards 26,600.”

Another analyst highlighted the mixed sectoral performances, stating, “Metals stocks saw a resurgence, while the Pharma and IT sectors saw an uptick on account of weakness in INR. Meanwhile, investors are looking forward to the Q2 earnings report, anticipating an improvement in earnings outlook.”

As markets adjust to the recent highs and sectoral shifts, investors remain attentive to upcoming earnings reports and broader economic indicators that could influence future market trends.

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