Closing Bell: Market Falls For 2nd Straight Day, Sensex & Nifty Ends Lower; Reliance, ITC & Wipro Drag

Indian stock market benchmarks, the Nifty 50 and the Sensex closed in the red on Monday, July 22, 2024, marking a second consecutive session of losses. Despite the overall downtrend, midcap stocks showcased a remarkable performance, providing a glimmer of hope ahead of Union Budget 2024.

The Sensex fell by 103 points to close at 80,525, while the Nifty 50 slipped 22 points to end at 24,509. These declines were influenced by mixed reactions to quarterly earnings reports and cautious sentiment ahead of the budget announcement. However, the midcap index stood out, gaining 716 points to close at 56,625, indicating robust investor interest in this segment.

The decline in key indices was primarily due to the underperformance of major heavyweight stocks like Reliance Industries, Kotak Mahindra Bank, ITC, and Wipro. However, gains in HDFC Bank, Infosys, and Mahindra and Mahindra provided some support to the indices.

PSU stocks experienced significant buying interest, making the Nifty PSE index the top gainer with a 2% rise. This surge was driven by positive expectations from the budget, which is anticipated to include favourable policies for PSUs.

Wipro faced a sharp drop, marking its biggest single-day fall in 11 years, due to weak Q1 results and muted guidance. Conversely, HDFC Bank provided a positive lift to the market, ending 2% higher after reporting better-than-expected earnings, which contributed 62 points to the Nifty and 351 points to the Nifty Bank index.

Cement stocks like Grasim and UltraTech Cement were among the top gainers in the Nifty. Railway and defence stocks showed strong movement ahead of the budget. BEML, IRCTC, and Hindustan Aeronautics Limited (HAL) saw gains, with HAL up by 4%, reflecting positive investor sentiment towards government spending in these sectors.

Several midcap stocks displayed gains, contributing to the overall positive market breadth. Zydus Life rose 3% following approval from the Mexican regulator for a cancer biosimilar, boosting investor confidence. Motilal Oswal upgraded its rating on Persistent Systems to 'buy,' leading to a 4% rise in the stock.

Indus Towers gained 3% after receiving a positive brokerage note from Citi. Yes Bank, Oberoi Realty, and Indian Hotels saw a significant uptick, up to 8%, driven by healthy Q1 results. Anant Raj surged 8% following a memorandum of understanding (MoU) with Google for data centre infrastructure.

Garden Reach Shipbuilders & Engineers ended its two-day losing streak with a 4% increase after signing two MoUs. Dodla Dairy and Solara Active both rose up to 7% on the back of strong Q1 results.

Poly Medicure slipped 7% from its highs after reporting its Q1 earnings, indicating investor disappointment with the results. Wipro saw a significant decline due to underwhelming quarterly performance and guidance.

The mixed performance of the Indian stock market ahead of the Union Budget 2024 highlights the cautious yet optimistic sentiment among investors. While the Nifty 50 and Sensex ended lower, the robust performance of midcap stocks and PSUs signals underlying strength and positive anticipation for budgetary announcements. As the market awaits detailed budgetary policies, the focus remains on sectors likely to benefit from government spending and reforms, particularly PSUs, defence, and infrastructure.