Stock market today: Nifty 50, Sensex retreat after reaching all-time highs, broader markets underperform

The Indian market’s response to the US Federal Reserve’s significant rate cut on Wednesday was relatively subdued compared to its global and Asian counterparts. Instead of celebrating the move, Indian investors opted to book profits during Thursday’s trade, resulting in only modest gains for the front-line indices.

The trading day started on a positive note, with the rate cuts fueling optimism. This led the Nifty 50 to surpass the 25,600 mark, reaching a record high of 25,611 points. Similarly, the S&P BSE Sensex also hit a milestone, crossing 83,700 points to touch a new high of 83,773 points.

However, as the day wore on, both indices began to lose their earlier gains. This decline was primarily driven by losses in the PSU, telecom, and IT sectors. While banking stocks maintained their upward trajectory for the second consecutive trading day and FMCG stocks provided some support, they were not sufficient to push the indices higher.

By the end of the session, the Nifty 50 recorded a slight gain of 0.16%, closing at 25,430 points. The S&P BSE Sensex finished with a gain of 0.23%, ending at 83,135 points. Out of the 50 Nifty constituents, 29 stocks ended in positive territory.

Notable among the decliners was NTPC, which saw a 2.3% drop. Other significant losers included Kotak Mahindra Bank, Titan Company, Hindustan Unilever (HUL), Nestle India, Tata Consumer Products, Maruti Suzuki India, and Bajaj Auto, all of which experienced declines between 0.8% and 1.7%.

Mid and Small-cap stocks experience significant strain

The mid and small cap stocks have suffered heavy losses in Thursday’s trade, with the Nifty Midcap 100 index tumbling by 0.50%, dropping below the 60,000 level to reach 59,457 points. At one point, the index tumbled by 2.3%, but later it recovered at the end of the trade.

Likewise, the Nifty SmallCap 100 index suffered even badly as it ended the session with a loss of 1.07% at 19,180 points.

Commenting on today’s sharp fall in mid and small cap stocks, Santosh Meena, Head of Research, Swastika Investmart, said, “The midcap and smallcap segments, particularly sectors like defense, railways, and capital goods, which have performed exceptionally well over the past 2-3 years, are now witnessing a sharp correction.

“Valuations have long been a concern in the broader market, yet these stocks continued to rally despite being considered expensive. However, there always comes a point when market euphoria fades. Domestic institutions, too, have shown signs of caution, holding significant cash reserves at elevated levels. I believe this correction could extend further, presenting a strong buying opportunity in high-quality stocks for long-term investors,” Santosh Meena added.