The Indian equity markets wrapped up Tuesday's trading session with a mild uptick, as the Sensex closed at 82,570.91, gaining 317.45 points. The Nifty 50 ended just below the 25,200 mark, closing at 25,195.80, up by 113.50 points. Although the major benchmarks registered only modest movement, the real story was unfolding in the broader market, where mid-cap and small-cap stocks displayed stronger momentum and investor confidence.
This renewed energy in the broader indices comes against the backdrop of easing consumer price inflation. The lower inflation numbers have triggered fresh hopes of an interest rate cut, which in turn has encouraged buying in rate-sensitive sectors. These include sectors like auto, realty, and pharmaceuticals, all of which closed in the green. The Nifty Bank index also participated in the rally, closing at 57,006.65 with a gain of 0.43 percent.
According to analysts, the sentiment in broader markets was bolstered by the improving inflation outlook. However, gains on the headline indices remained restrained due to underperformance in the information technology space. HCL Technologies, in particular, dragged down the sector with weak earnings results. Financial stocks such as Axis Bank, Kotak Mahindra Bank, and Tata Steel also saw some selling pressure, keeping a tight lid on further upside.
Among Sensex stocks, Sun Pharma, Bajaj Finserv, Tata Motors, Mahindra & Mahindra, and Infosys were the top performers of the day. These companies benefited from renewed investor interest as expectations around earnings and sectoral growth picked up pace.
On the flip side, HCL Technologies remained the biggest drag due to disappointing quarterly numbers. Other stocks that failed to impress included Eicher Motors and NTPC, both of which were under selling pressure during the session. Despite this, the overall market breadth remained positive thanks to the strong showing from mid and small-cap counters.
Sectorally, the day belonged to some of the more niche segments. Fertiliser stocks were in the limelight, recording a 2.32 percent jump in market capitalization. Cables followed closely with a 2.26 percent rise. Non-alcoholic beverage companies also gained traction with a 1.75 percent boost, while companies in the edible fat category saw a 1.66 percent increase in market value. These gains reflect growing confidence in select consumption and infrastructure-driven stories that investors expect to benefit from the broader economic recovery.
Business group performance also painted a mixed picture. The Nagarjuna Group stood out with a 4.64 percent rise in market capitalisation, followed by the Hero and Dhanuka Groups, both gaining over 4 percent. Pennar Group also saw a strong move with a 4.37 percent rise. However, not all groups had a reason to celebrate. Jaypee Group experienced a steep 8.57 percent decline, making it the biggest loser among conglomerates. HCL Group’s poor performance also weighed on the index with a fall of 3.15 percent. Other underperformers included the Future Group and JSW Group, both closing in the red.
While today’s gains were modest, the activity in mid and small-cap segments points toward a healthy undercurrent in the market. Investors appear to be shifting focus toward more growth-oriented, under-owned pockets of the market as valuations in large caps remain stretched. The positive inflation data and expectations of policy easing are further aiding this risk-on sentiment, though caution remains due to patchy results from major IT players.
With earnings season underway and key policy decisions on the horizon, the coming weeks could bring more directional clarity. For now, the action in small and mid-caps seems to be the market’s way of preparing for the next leg of growth.
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