Benchmark indices recover from sharp early losses

After slipping more than 1,000 points during intra-day trade, the BSE Sensex pared losses to end 77 points, or 0.10 per cent, higher at 75,315. The NSE Nifty 50 closed at 23,650, up 6.4 points, or 0.03 per cent, from Friday’s close.

However, broader markets underperformed the benchmark indices. The BSE MidCap index closed at 45,898.32, down 101.37 points, or 0.22 per cent, while the SmallCap index fell 764 points, or 1.47 per cent, to settle at 51,734.31.

The overall weakness was reflected in investor wealth erosion by ₹2.22 lakh crore during the session. Market breadth remained weak, with 1,264 stocks advancing against 3,034 declines on the BSE, resulting in an advance-decline ratio of 0.42.

What do market observors say?

Nandish Shah, deputy vice-president at HDFC Securities, said the weak advance-decline ratio reflected continued profit booking in mid- and small-cap stocks.

Among sectoral indices, information technology, private banks, healthcare and telecom stocks emerged as the top gainers, while media, public sector banks and consumer durables stocks declined.

Top gainers on the Sensex included Tech Mahindra, Infosys, Bharti Airtel, Bajaj Finserv and Sun Pharmaceutical Industries. The major laggards were Tata Steel, Power Grid Corporation of India, State Bank of India, NTPC and Trent.

Both foreign and domestic institutional investors were net buyers during the session. Foreign institutional investors (FIIs/FPIs) bought equities worth ₹2,813.69 crore, while domestic institutional investors purchased shares worth ₹2,682.12 crore, according to provisional BSE data.

Vinod Nair, head of research at Geojit Investments, said the prolonged deadlock between the US and Iran continued to weigh on near-term sentiment, though value buying in IT and banking stocks helped the market recover from intra-day lows.

“The ongoing earnings season has provided a constructive narrative, though caution persists as higher bond yields, elevated crude oil prices and a weakening rupee reinforce inflationary concerns,” he said.

From a technical perspective, Shah said that positive closes in three of the last four sessions signalled early buying interest at lower levels. He added that 23,800 remained a key resistance level for the Nifty, and a decisive breakout above it would be necessary for bullish momentum to strengthen further.

Nair said investors were increasingly adopting a staggered allocation strategy rather than waiting for complete clarity, particularly in export-oriented sectors. He added that a meaningful diplomatic breakthrough in the West Asia conflict — especially on issues related to uranium stockpiles and sanctions — would be critical in reducing volatility and supporting a sustained market rally.