Indian equity benchmarks witnessed a cautious trading session on Thursday as investors remained on the sidelines ahead of the Q1 earnings season. Both the Sensex and Nifty ended in the red, dragged down primarily by losses in the IT and telecom sectors. The market appeared to reflect a wait and watch sentiment, especially with the results of industry heavyweight Tata Consultancy Services expected to set the tone for the season.
The Sensex closed the session at 83152.84, marking a fall of 383.24 points which translates to a decline of 0.46 percent. Similarly, the Nifty settled at 25355.25 after slipping by 120.85 points or 0.47 percent. Even the banking sector could not hold ground as the Nifty Bank ended the day at 56956, down 0.45 percent.
Investor sentiment was impacted by expectations of a muted earnings season in the IT and financial sectors. Market experts believe that the recent underperformance of IT stocks has already priced in the expected softness in results, thereby limiting any further downside in the near term. However, caution continues to dominate trading behavior. While large cap stocks bore the brunt of the selling, mid cap and small cap segments showed relative resilience. Their limited reaction hinted at investors waiting for clearer earnings signals before placing new bets.
Among the top gainers of the day were names from the auto and financial sectors. Stocks like Maruti Suzuki, Tata Steel, Bajaj Finance, Bajaj Finserv, and Trent provided some support to the broader market, helping cushion the fall to an extent. Their performance helped absorb some of the negativity stemming from losses elsewhere.
On the other hand, notable losers included frontline IT and telecom stocks. Bharti Airtel, Asian Paints, Infosys, and Bharat Electronics were among the stocks that weighed heavily on market sentiment. These companies experienced a round of selling pressure due to negative expectations around quarterly numbers and other sectoral headwinds.
The BSE saw mixed action across its sectoral indices. While some segments struggled, select indices stood out for their gains. The BSE SME IPO index recorded impressive performance and was the leading gainer. The BSE Metal index also showed strength, reflecting renewed interest in metal and commodity linked counters. Other indices like the BSE Enhanced Value and BSE SmallCap posted marginal upticks, indicating some level of buying interest in niche and undervalued segments.
From a sectoral point of view, leather stocks led the gains, witnessing a 1.45 percent increase in market capitalisation. The glass industry followed with a 1.39 percent rise, while the electronics sector also gained nearly 0.9 percent. The iron and steel segment finished the day with a modest 0.75 percent uptick, showing some resistance to the broader market weakness.
As the earnings season gains pace, the spotlight is firmly on TCS, whose Q1 results are expected to influence early trading sentiment on Friday. According to analysts, the management’s commentary will be critical in shaping market direction. Nifty is now hovering close to a crucial support zone marked by its 20 day exponential moving average and the upper end of its previous consolidation range, around the 25200 to 25300 levels. If the index holds above this support, it could maintain its near term positive bias.
Given the macroeconomic backdrop and sector specific trends, investors are advised to remain selective. The focus should remain on company specific fundamentals and management outlook as this earnings season is likely to provide pockets of opportunities in an otherwise cautious market landscape.
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