Benchmark indices closed lower during the Diwali Muhurat trading session, marking the first decline in nine years. The drop was driven by profit-taking in banking and financial stocks after a recent rally. This pullback occurred despite a strong start to the session, with indices slipping into negative territory in the final minutes of trading.
The Nifty 50 ended at 24,986.40 points, down 0.2%, while the BSE Sensex closed at 80,999.40 points, down 28.62 points. Sun Pharmaceutical Industries, Tata Steel, and Oil and Natural Gas Corporation saw gains of 1-3%, outperforming the broader market. Conversely, the Nifty Realty and Nifty Bank indices fell 0.4–0.7%, reflecting sector-specific weakness.
Profit-Taking and Sector Performance
Stocks like SBI Life Insurance Company, InterGlobe Aviation, and Bharti Airtel declined more than 1%. HDFC Bank and Infosys also contributed to the downturn, falling 0.5% and 0.8% respectively. The India VIX, a measure of market volatility, rose 5.5% to 18.43 points, reflecting increased uncertainty. Technical analysts attributed the decline to profit-booking after a 10% rise in the Nifty 50 over seven sessions, with the relative strength index (RSI) indicating overbought conditions.
Small-Cap and Sectoral Gains
Small-cap indices outperformed, with the Nifty Smallcap 250 rising 1.2%. Sectoral indices like Nifty Pharma, Nifty Healthcare, and Nifty Media gained 1.5-1.7%. Divi’s Laboratories, the best performer in the Nifty 200 index, rose 7.5% after reporting strong quarterly results and a bullish outlook. Finolex Cables shares surged nearly 20% following robust September-quarter numbers, while its peer, RR Kabel, advanced over 10%, making them the top performers in the Nifty 500 index.
Zee Entertainment Enterprises surged nearly 7% after announcing a board meeting to address shareholder returns and consider a share buyback. This move comes amid efforts to improve investor sentiment after a period of poor returns.
Market Sentiment and Future Outlook
Crude oil prices and foreign institutional activity remain key factors influencing market sentiment. Foreign institutional investors bought a record INR 137.5 billion in Indian equities on Friday, driven by a global shift away from AI-linked stocks. Analysts expect crude oil prices to remain a dominant force in shaping investor sentiment going forward.
Analysts expect the 24,300–24,500 range to act as support for the Nifty 50, with resistance around 25,500. Large-cap banking stocks like HDFC Bank and ICICI Bank are expected to support future rallies. In derivatives, sellers were active across the Nifty 50 options chain, with closer-to-the-money call contracts across 25000-25500 strike prices declining 20-30%. Put contracts expiring on Monday saw premiums across 24500-24800 strike prices tumble 30-40% as traders sold them relentlessly.
On the downside, HBL Engineering shares fell 4.5% after its consolidated net profit for the September quarter dropped by roughly 50% year-on-year. Voltas also underperformed, slumping to the bottom of the Nifty 200 index following weaker-than-expected bottom-line expansion for the quarter.
