Closing Bell: Market Ends Flat, Sensex & Nifty Remain Unchanged, Midcaps Shine; IT Stocks Lead Rally

Indian equity markets ended Friday's session flat, as key indices failed to hold on to their record levels achieved the previous day. While the market saw a strong rally during Thursday's close, it couldn't sustain the momentum, especially as weakness in the pharma and FMCG sectors weighed on overall performance. Nonetheless, the midcap segment outperformed with a historic high, while certain sectors like IT and jewellery stole the spotlight.

The Sensex closed 72 points lower at 82,891, while the Nifty 50 slipped by 32 points, ending the day at 25,357, marking a decline of 0.13%. Despite these losses, the session saw action in individual stocks and sectors. IT and midcap stocks provided crucial support, although weakness in pharma and FMCG sectors dragged the broader indices.

The Nifty Midcap 100 index, in particular, was the day's standout performer. The index surged by 394 points, or 0.66%, closing at an all-time high of 60,034 points. It crossed the 60,000 mark for the first time during the session, touching an intraday high of 60,189. This continued the positive trend in midcaps, which have outperformed largecap stocks in recent weeks. The banking sector showed resilience, with the Nifty Bank index gaining 166 points to close at 51,938, supported by strong performances in private sector banks.

One of the most significant movers in Friday's session was the Nifty IT index, which rose by 1%, touching a fresh all-time high. All ten stocks in the index ended the day in the green, with Wipro leading the pack. Wipro's stock surged 4.2% to Rs 552 per share, driven by strong volumes. Other notable gainers included MphasiS (up 2%), Coforge (up 1.9%), L&T Technology Services (up 1.5%), and Persistent Systems (up 1.4%).

The rally in IT stocks is attributed to improving global economic conditions, particularly in regions where Indian IT companies have significant revenue exposure. With central banks cutting interest rates amid moderating inflation, the demand for IT services is expected to remain robust, providing a tailwind for the sector.

Several stocks, including MphasiS, Coforge, Persistent Systems, HCL Technologies, and LTIMindtree, reached new 52-week highs. The Nifty IT index has now gained 22.31% year-to-date, far outperforming the broader Nifty 50 index, which has risen 16% in the same period.

Jewellery stocks surged on Friday, benefiting from a sharp rise in gold prices. As global central banks began cutting interest rates, gold reached new all-time highs, boosting sentiment in the jewellery sector. Several stocks, including Tribhovandas Bhimji Zaveri (TBZ), Kalyan Jewellers, Senco Gold, Motisons Jewellers, PC Jeweller, and Thangamayil Jewellery, saw gains ranging from 4% to 18.5%.

The rising price of gold can be particularly advantageous for regional jewellery companies, as many of them keep a large portion of their gold inventory unhedged. This allows them to directly capitalize on price increases through inventory gains. However, larger players like Titan and Kalyan Jewellers typically hedge around 70% to 90% of their gold holdings. Even so, these companies can still benefit from the unhedged portion of their inventories.

Jewellery stocks have been on a strong run recently, buoyed by multiple tailwinds, including a reduction in customs duties on gold and silver, increased demand for wedding jewellery, and positive brokerage outlooks. The upcoming festive season is expected to further drive strong sales in the sector.

Wipro led the IT sector rally, rising nearly 4% on healthy volumes, making it one of the top gainers of the day. Bajaj Finance & Bajaj Finserv both stocks gained 2% ahead of the listing of Bajaj Housing Finance.

Jewellery companies saw a jump with TBZ gaining a whopping 20% on the back of rising gold prices. Adani Group companies, including Adani Enterprises and Adani Ports, fell by up to 2% following reports of a fund freeze by Swiss authorities.

Life insurance companies, SBI Life and HDFC Life were among the top losers on the Nifty, as both stocks declined amid profit booking. Nazara Technologies gained 4% after the company announced a major stake acquisition in PokerBaazi's parent company for Rs 982 crore.

Asian Paints ended a 10-day gaining streak as crude oil prices surged above $72 per barrel. This led to some profit booking in the stock, which ended in the red.

SpiceJet jumped 8% after the company filed a plea in the Supreme Court to challenge an order grounding its leased engines. The stock gained on optimism that the issue could be resolved quickly.

While the broader indices ended the day flat, sectoral performances, especially in IT and jewellery stocks, provided pockets of opportunity for investors. The surge in midcap stocks, along with the robust performance of IT and jewellery sectors, suggests that specific segments of the market are still showing strong momentum despite the overall market consolidation. With the festive season around the corner and global economic conditions improving, these sectors are likely to remain in focus in the coming weeks.