Tech giants pull markets down as Sensex, Nifty close lower; defence stocks shine 

Benchmark indices closed marginally lower on Friday after Thursday’s strong rally, with major IT stocks dragging markets down, while the defence and consumer sectors showed strength. The BSE Sensex ended 200.15 points or 0.24 per cent lower at 82,330.59, while the Nifty 50 slipped 42.30 points or 0.17 per cent to close at 25,019.80.

The markets exhibited range-bound movement throughout the session, coming off yesterday’s strong upside breakout. “The tone remained subdued from the outset, with consolidation in heavyweight stocks across sectors capping the move throughout the session,” said Ajit Mishra, SVP, Research at Religare Broking Ltd.

Despite weakness in headline indices, the broader markets demonstrated strength. The Nifty Midcap 100 advanced 0.94 per cent to 57,060.50, while the Nifty Next 50 surged 1.29 per cent to 67,078.95. The market breadth remained positive, with 2,607 stocks advancing, versus 1,380 declining on the BSE. Additionally, 83 stocks hit 52-week highs, compared to 27 touching 52-week lows.

Among sectoral gainers, defence stocks continued their remarkable run, with Bharat Electronics Ltd (BEL) leading the charge among Nifty gainers, surging 3.82 per cent to close at ₹363.80. The defence sector has now extended its winning streak for a sixth consecutive session.

Consumer stocks also performed well, with Tata Consumer Products rising 1.99 per cent to ₹1,170 and Hindustan Unilever gaining 1.05 per cent to ₹2,380. Auto major Bajaj Auto climbed 1.98 per cent to ₹8,491, while Adani Enterprises added 1.23 per cent to close at ₹2,551.

The IT sector faced significant selling pressure, dragging the markets lower. Tech heavyweights led the losers’ chart with HCL Technologies dropping 2.06 per cent to ₹1,661, and Infosys declining 1.46 per cent to ₹1,589.40. Bharti Airtel was the biggest Nifty loser, falling 2.83 per cent to ₹1,814.40. JSW Steel and Shriram Finance also closed lower by 1.35 per cent and 1.26 per cent, respectively.

The banking sector remained nearly flat, with the Nifty Bank index marginally down by 0.70 points to close at 55,354.90. Similarly, the Nifty Financial Services index edged 0.03 per cent lower to 26,474.60.

In the currency market, the Indian rupee showed resilience despite headwinds. “The Indian rupee initially strengthened against the dollar, buoyed by a weaker greenback. However, it subsequently experienced a gradual decline due to a larger-than-anticipated trade deficit and a resurgence in the dollar index and crude oil prices,” noted Dilip Parmar, Senior Research Analyst at HDFC Securities. He added, “Looking ahead, the USDINR spot rate is expected to find support around the 84.90 level, while facing resistance near 85.94.”

Commodity markets saw significant movements, with gold witnessing a rebound from recent lows. “COMEX gold rebounded sharply yesterday from a one-month low of $3,123.30/oz, driven by a weakening US dollar, following a softer-than-expected April Producer Price Index (PPI) report,” said Kaynat Chainwala, AVP – Commodity Research at Kotak Securities. Gold prices edged lower to $3,209/oz today as markets await US housing figures and consumer sentiment reports.

Meanwhile, crude oil markets reacted to geopolitical developments. “WTI crude extended losses yesterday, falling to $60.5/barrel, as President Trump stated that the US is close to reaching a nuclear deal with Iran,” Chainwala added. The potential lifting of sanctions on Iranian oil could increase global supply, adding to the bearish sentiment in oil markets. Today, oil prices inched higher to $62.3/barrel on a weaker dollar.

Looking ahead, analysts remain optimistic about market prospects. “More than the recovery in the benchmark index, the broad-based rebound has offered greater relief to market participants. Sustained FII inflows and stable global markets are further contributing to the positive sentiment,” Mishra observed.

For the coming week, Bajaj Broking Research expects the Nifty to maintain a positive bias and head towards 25,200-25,300 levels. “The recent breakout zone, along with last week’s low placed near 24,400–24,500 levels is expected to serve as a crucial support for the Nifty,” their report stated.

Shrikant Chouhan, Head of Equity Research at Kotak Securities, highlighted positive macro factors for the Indian economy, including “low crude oil prices, expected good monsoon, RBI rate cut and lower inflation.” He also noted that the increase in FII inflows demonstrates positive sentiment for India, possibly reflecting conviction among investors that India is a relatively better market amid global growth challenges.

Published on May 16, 2025