Sensex, Nifty dip; mid, smallcaps jump 2% on IT slide :

Although growing valuations may begin to weigh on fundamentals, experts suggest that if foreign inflows continue, the market could continue its upward trajectory with momentum currently leaning towards largecaps.

On May 16, benchmark indices Nifty and Sensex continued to decline, driven down by a steep selloff in banking, pharmaceutical, and IT industries that affected mood generally. The overall market held up well, though, with small and mid-cap companies continuing to beat their large-cap counterparts.

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The Nifty was down 85.10 points, or 0.34 percent, at 24,977.00 at noon, while the Sensex was down 309.81 points, or 0.38 percent, at 82,220.93. Approximately 122 shares stayed the same,1180 shares fell,and 2218 shares increased.

Despite concerns that, as a US-China trade deal moves forward,international investors may abandon Indian stocks in favor of cheaper Chinese ones,they surprised the market yesterday with robust purchases of Rs 5,393 crore. “A rapid rally was driven by a wave of short covering in largecaps that was sparked by the unexpected influx. Although rising valuations may begin to impact on fundamentals,the market may continue to rise if foreign inflows continue,according to V K Vijayakumar,Chief Investment Strategist at Geojit Financial Services,who noted that momentum was currently leaning towards largecaps.

On May 15, there were mixed sectoral movements on the NSE, with overall markets continuing to fare well. Both the Midcap 100 and Nifty Smallcap 100 indices increased by 0.76 and 1.39 percent, respectively.

With a 1.44 percent increase, the Nifty Realty index topped sectoral gainers. Additionally, Nifty Energy (0.72 percent), Media (0.57 percent), Auto (0.38 percent), FMCG (0.31 percent), Consumer Durables (0.35 percent), and PSU Bank (0.19 percent) also saw gains. Conversely, the Nifty IT index fell 1.02 percent, and the Pharma, Metal, Infra, Bank, and Private Bank indices all saw declines. In the meantime,market turbulence subsided,as the India VIX dropped 1.72 percent to 16.60.

As investors applauded the government’s renewed emphasis on domestic defense manufacture, defense sector stocks surged for the sixth straight session Friday afternoon,with Cochin Shipyard,Mazagon Dock Shipbuilders,and Bharat Electronics Ltd (BEL) among the top gainers.Today’s session saw the Nifty India Defence index reach a new 52-week high,reaching 20% since May 9.

Following the lender’s disclosure of two fresh accounting errors, brokerages became more cautious,causing IndusInd Bank shares to drop 3%. In addition to downgrading the stock, analysts also pointed out steep declines in their earnings projections for FY25–2027.The private lender stated in a regulatory filing on Thursday night that its Internal Audit Committee (IAD) was reviewing the bank’s MFI operations in order to look into some issues that were brought to the bank’s notice.

Following the food delivery giants’ reduction of membership incentives prior to the monsoon season,Swiggy and Zomato’s stock increased by 3%. Users of Zomato Gold and Swiggy One are now subject to a “rain surcharge” while ordering food. Customers with membership privileges were not previously subject to any additional fees from the companies. The most recent update states that Swiggy One and Zomato Gold members would receive the same treatment as non-members. The decision was made at a time when investors are putting tremendous pressure on Swiggy and Zomato to enhance their profit profiles.

“With key support now situated close to the 24,500 level,which must be maintained to maintain the overall bias,the Nifty has initiated a breakout and opened the gates for new upside targets of 25,400 and 25,800 levels. With a strong bias,the Sensex extended its gains and broke above the 82,000 zone,continuing its upward trajectory. Prabhudas Lilladher wrote in a note that the Sensex is targeting the 84000 milestone in the upcoming sessions. “The undertone has become strong, with the broader markets actively participating in the rally, supporting the benchmark indices with near-term support maintained near the important 20DMA zone at the 80,200 level, which needs to be sustained as of now,” the brokerage stated.

The top Nifty gainers were Adani Enterprises,Bajaj Auto,Eicher Motors,NTPC,and Bharat Electronics. The index’s biggest laggards were Bharti Airtel,IndusInd Bank,Shriram Finance,SBI,and HCL Tech.

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