Indian Equities Decline In Choppy Trade; SEBI RAs See Rangebound Session Despite GST Boost

Indian equities opened higher on Friday before paring all gains to decline within the first hour of trade. Sentiment on Dalal Street remained cautious after Thursday’s late selloff driven by profit booking.

The benchmark indices rose by as much as 1% in the previous session, with heavy buying in consumer goods and auto stocks following the GST Council's approval of rate cuts in more than 175 product categories. However, the Nifty 50 index closed nearly unchanged while the Sensex gained 0.19%.

Gains in auto stocks today were offset by losses across multiple sectors, primarily FMGC and IT.

At 10:15 a.m. IST, the Nifty 50 was trading at 24,677.55, while the Sensex fell to 80,496.36. Broader markets were mixed, with the Nifty Midcap index falling 0.02% and the Smallcap index trading 0.2% higher.

However, retail sentiment for the Nifty 50 turned ‘bullish’ on Stocktwits. It was ‘neutral’ a day earlier.

Stocks In Focus

Two-thirds of the stocks in the FMCG sector declined in early trade. ITC’s stock was down 2.2%, Emami’s shares shed 2.1%, while Marico and Nestle India fell 0.7% each.

Every stock in the Nifty IT index fell, with heavyweights Tata Consultancy Services (TCS) and Infosys losing over 2% each. Mphasis was the biggest laggard on the index, declining 3.3%.

Among the gainers, every stock in the Nifty Auto index was trading higher, led by Mahindra & Mahindra (+2.05%), Exide Industries (+1.92%), and Ashok Leyland (+1.8%). Carmakers Maruti Suzuki and Tata Motors were trading up 1.34% and 1.28%, respectively.

Zydus Life Sciences was up 2.5% after its unit Zydus Lifesciences Global FZE signed an exclusive licensing and supply deal with Synthon to supply a sclerosis drug.

Analysts’ Takes

The market’s reaction to the GST rate cut has been puzzling. While most expected it to be positive, the day’s decline after a gap-up opening raises doubts, said SEBI RA Bharat Sharma.

Normally, some profit booking is acceptable, but the lack of recovery suggests deeper concerns. If every sector remains weak, it hints that the GST cut decision may have underlying factors not fully understood yet, Sharma said.

Technically, the market closed below the negative trendline again, so the broader view and strategy remain unchanged.

For intraday, support is placed at 24,700, and a breakdown could push levels towards 24,650 - 24,600 - 24,560, while resistance stands at 24,770, with a move above that opening room for 24,840, 24,920, and 25,000, respectively, the analyst added.

For intraday trading, the Nifty faces resistance in the 24,738-24,800 band and has support between 24,461 and 24,490, according to SEBI RA A&Y Market Research.

Bank Nifty’s resistance lies between 54,177 and 54,248, while support is placed between 53,495 and 53,660, they added.

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