Closing Bell: Market Ends Lower; Sensex & Nifty Slip, Midcap Index Shines; Pharma & Metal Stocks Lead

Indian equity markets ended in the red for the second consecutive session on Friday, October 11, with both the Sensex and Nifty closing with minor losses. The Sensex dropped 230 points to settle at 81,386, while the Nifty fell 34 points to end at 24,964. Despite the volatility, midcaps stood out as a bright spot, with the Midcap Index gaining 277 points to close at 59,213. In contrast, financial stocks weighed heavily on the broader markets, with ICICI Bank and Axis Bank emerging as the top losers in the session.

While the broader indices faced losses, sector-specific performances presented a mixed picture. Among the sectoral indices, the Nifty Pharma Index stood out with a gain of 1.19%, followed closely by the Nifty Metal Index, which rose by 0.94%. The Nifty IT Index also managed to close in the green, rising by 0.60%. On the flip side, the Nifty Bank Index reversed its strong performance from the previous session, falling by 0.70%. The Nifty Realty Index also experienced pressure, ending the session with a decline of 0.69%.

For the week, both the Nifty 50 and Sensex registered losses of 0.20% and 0.40% respectively, as concerns over the ongoing Middle East conflict, foreign portfolio investor (FPI) outflows, potential moderation in earnings, and elevated valuations weighed on investor sentiment.

Fresh data released on Thursday heightened concerns over inflation. September's consumer price index (CPI) rose by 0.2% on a monthly basis and by 2.4% annually, both figures slightly exceeding economists' expectations. The core CPI, which excludes volatile food and energy prices, rose by 3.3% year-over-year, compared to the estimated 3.2%. This data intensified the debate about the Federal Reserve's potential rate cut next month.

Additionally, the US Labor Department reported a sharp rise in jobless claims, with 33,000 more people filing for unemployment benefits, reaching 2,58,000 for the week ending October 3. This is the highest level since August 2023, much higher than the expected 229,000. As inflation persists and the labor market softens, the Federal Reserve may consider a smaller rate cut or even pause its rate-cutting cycle.

The Atlanta Fed President Raphael Bostic indicated that he would consider holding rates steady in November depending on economic conditions. This comes after the US economy added 2,54,000 jobs in September, a significant increase from August's 1,59,000 and well above the forecasted 1,40,000.

The market saw a range of sectoral performances and stock-specific action on Friday. Noel Tata's appointment as Chairman of Tata Trusts buoyed Tata Group stocks such as Trent, Tata Investment, and Voltas, with all three posting gains. Similarly, TCS's commentary after its Q2 earnings miss helped boost BFSI-led IT stocks like Persistent Systems, Mphasis, and LTIMindtree.

HCL Tech, Infosys, and Tech Mahindra were among the major gainers in the IT space, rising 2% each, while TCS itself hit a three-month low, falling 2% after reporting disappointing earnings.

Metal stocks also received a boost, with hopes of additional stimulus from China lifting the Nifty Metal Index by 1%. The Chinese government is expected to announce new fiscal measures to stimulate its economy, which may provide a tailwind for global metal prices.

In stock-specific action, Sudarshan Chemical surged 20% on news of its acquisition of Heubach Group for Rs 1,180 crore, while Bandhan Bank jumped 11% after receiving the Reserve Bank of India's (RBI) nod for its CEO appointment and a payment from the National Credit Guarantee Trustee Company (NCGTC).

Ashoka Buildcon gained 3% after bagging a project worth Rs 900 crore, while Just Dial rose nearly 3% on the back of a strong Q2 results update. On the other hand, CreditAccess continued to face selling pressure as Nomura downgraded the stock following disappointing Q2 earnings.

The market breadth remained neutral throughout the day, with an advance-decline ratio of 1:1, indicating an evenly matched battle between bulls and bears. The BSE midcap and smallcap indices outperformed largecap stocks, with the Midcap Index rising by 1%.

For the week, pharma and auto stocks were the best performers among sectoral indices, gaining 2% each. In contrast, FMCG and auto stocks faced pressure, declining by 2% each. Notable gainers on the Nifty included Trent, Kotak Bank, Mahindra & Mahindra, and HCL Technologies, while Titan, Britannia, Tata Steel, SBI Life, and Nestle were among the top losers.