The benchmark indices ended lower on Wednesday, reversing early gains as a significant downturn in IT stocks undermined stronger performances in banking and metals. Investors adopted a cautious stance ahead of the release of the US Core PCE inflation data, which is anticipated to provide additional insights into the Federal Reserve’s monetary policy direction. The BSE Sensex dropped by 183.15 points, equating to a decline of 0.24%, settling at 77,472.94. Concurrently, the Nifty 50 decreased by 126.80 points, or 0.52%, finishing at 24,207.75.

Initially, the Sensex opened at 77,892.10 and reached a high of 77,986.84, but failed to maintain its upward momentum. Likewise, the Nifty started at 24,341.95 but fell short of its opening level as selling pressure intensified.

Market sentiment shifted as inflation fears subsided owing to moderated US sanctions against Iran. This eased domestic bond yields, thereby boosting banking stocks and raising prospects in the metals sector. However, these gains were largely neutralised due to the slump in IT stocks, following a suspension of US visa appointments aimed at tightening immigration policies, which revived concerns regarding profit margins.

Sector Performance Analysis

The sectoral landscape displayed a mixed performance. The Nifty IT index was the leading underperformer, plummeting by 1.47%. Other sectors that faced losses included Nifty FMCG, which fell by 0.95%, Nifty Consumer Durables, down by 0.93%, Nifty Auto, which decreased by 0.74%, and Nifty Oil & Gas, which dipped by 0.58%. In contrast, the Nifty Metal index gained traction, rising by 1.27%, while both the Nifty Private Bank and Nifty PSU Bank indices advanced by 1.04% and 0.77%, respectively.

The Nifty Financial Services index added 0.30%, with the Nifty Pharma showing a modest increase of 0.23%. Additional gains were recorded in sectors like Nifty Media, Nifty Financial Services ex-Bank, Nifty MidSmall Financial Services, and Nifty MidSmall Healthcare, which improved by marginal percentages.

Prominent stocks contributing to the decline included Infosys, which was the largest loser in the Nifty 50, down 1.94%. Other major decliners included Bharti Airtel, falling by 1.91%, Larsen & Toubro down 1.76%, and Power Grid, which dropped by 1.48%. Meanwhile, Tech Mahindra saw a decrease of 1.38%, and NTPC fell by 1.29%.

Notable Winners and Broader Market Trends

On the upside, Kotak Mahindra Bank emerged as the top gainer in the Nifty index, with a rise of 3.53%. Cement stocks improved by 1.87%, while Axis Bank advanced by 1.33%. Tata Steel recorded a gain of 1.10%, and Bajaj Finserv added 0.70%.

The broader market exhibited varied trends, as the Nifty 100 fell by 0.43%, Nifty 200 decreased by 0.36%, and Nifty 500 lost 0.22%. Conversely, the Nifty Midcap 50 and Midcap 100 saw minor declines of 0.17% and 0.10%, respectively. However, the Nifty Smallcap 100 rose by 0.81%, indicating some resilience within this segment.

In commodity markets, oil prices continued their downward trend. WTI crude oil fell by 2.70% to $80.14 per barrel, while Brent crude dropped by 2.99% to $85.93 per barrel. Market analysts noted that investors are now focusing on the upcoming US Core PCE data for further insights into future interest rates. A stable core inflation figure could suggest that recent spikes in energy-led inflation are temporary, potentially relaxing rate concerns and attracting capital to emerging markets.

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