Last trade: Indian stocks ended higher on Thursday’s session after opening at fresh record highs following a steep interest rate cut by the Federal Reserve. At close, the Nifty closed at 25,415.8, below the 25,450 level, down 0.15% or 38.25 points from the record high touched earlier today, while the Sensex rose 0.22% or 185.66 points to close at 83,133.89.
Meanwhile, the overall index, which had recorded a sharp drop of more than 2%, showed a steady recovery but ultimately ended up declining.
Sectorally, FMCG, banking, auto, consumer durables and real estate rose while metals, public sector banks and oil & gas indices declined by up to 1%. Moreover, after an initial recovery, the IT index fell for the second consecutive day as headwinds for the sector continued.
“The pressure on small and midcap stocks is driven by a variety of factors including regulatory concerns, valuation adjustments, profit booking, seasonal trends, liquidity issues, promoter selling and market sentiment,” Biguru CEO Atul Palak said.
These factors collectively have created a challenging environment for small and mid-cap indexes, leading to a correction in stock prices, he added.
In the Nifty pack, top gainers included NTPC, Kotak Mahindra Bank, Titan, Nestle and HUL while bottom losers included BPCL, Coal India, ONGC, Adani Ports and Shriram Finance.
Especially after the Federal Reserve cut interest rates more dramatically than expected. Santosh Meena, head of research at Swastika Investmart, believes that logically the move is positive for the equity market, but as the market seems to have already priced in a rate cut, we may not see a sustained uptrend.
However, she warned that there are potential risks of profit-taking, especially in the small and mid-cap sector.
Commenting on today’s market activity, Vinod Nair, Head of Research at Geojit Financial Services said, “Benchmark indices ended with modest gains after hitting fresh record highs after the US Federal Reserve delivered a larger-than-expected 50 basis points rate cut and hinted at further rate cuts.”
The sharp rate cuts raised concerns about a global economic slowdown, leading to profit booking in small and mid-cap stocks at premium valuations, he added.
Meanwhile, European stocks also traded up by as much as 2% as the Fed began its monetary easing cycle, but attention remains focused on the Bank of England’s policy decision.
