Profit-booking pulls Nifty, Sensex down; jewellery stocks shine

Indian stock markets ended Friday’s session flatly as investors took the opportunity to book profits. Both the Sensex and Nifty briefly touched Thursday's record highs but were unable to hold those levels, as weakness in pharma and FMCG stocks weighed on the market, despite strong support from IT stocks.

The Nifty 50 ended the session down by 0.13 percent, closing at 25,356 points. Among the 50 constituents, 20 stocks finished in positive territory, with Wipro leading the gainers, up 3.9 percent.

Other notable performers included Bajaj Finance, Bajaj Finserv, IndusInd Bank, Axis Bank, Tata Steel, and Grasim Industries, which saw gains ranging between 1 percent and 2.3 percent.

The Sensex also closed nearly flat, slipping 0.09 percent to 82,890 points. Among the sectoral indices, the Nifty Realty index rose by 1.75 percent, and the Nifty Media index increased by 1.74 percent. The Nifty PSU Bank index also gained 1.25 percent. In contrast, the Nifty Oil & Gas, Nifty FMCG, and Nifty Energy indices each fell by more than 0.6 percent.

`Markets took a breather' today

Commenting on today's market performance, Vinod Nair of Geojit Financial Services said, "The market took a breather and ended on a flat note after the previous day’s sharp uptick. Despite domestic CPI inflation being within RBI's target band, the increase in food prices may influence the RBI to remain prudent on rates. Higher liquidity from FIIs to the domestic market and a slide in US 10-year yield increased the prospects of the US Fed rate cut, which will aid domestic sentiment."

For the week, the Nifty 50 surged by 2.03 percent, marking its largest weekly gain since late June. The Sensex also finished the week up by 2.10 percent.

Midcaps, smallcaps on winning streak

Midcap and smallcap stocks extended their winning streak for a second consecutive session on Friday. The Nifty Midcap 100 index crossed the 60,000 mark for the first time, closing at 60,189 points with a 0.66 percent gain.

Among the top gainers in the midcap index, IDBI Bank led with a 7.9 percent increase, while Oracle Financial Services Software saw a 5.9 percent rise. Bandhan Bank shares surged 5 percent after Kotak Institutional Equities maintained a 'buy' rating with a target price of ₹250 per share. Overall, 66 constituents of the index finished in the positive territory.

The Nifty Smallcap 100 index rose by 0.78 percent, closing at 19,505 points. Of its constituents, 69 ended in the positive territory. IIFL Finance was the top performer in the index, with a gain of 7.2 percent.

Nifty IT touches all-time high

The Nifty IT index surged by 1 percent, reaching a fresh all-time high in today's trade, as central banks, where Indian IT companies have significant revenue exposure, began cutting interest rates due to moderating inflation.

All 10 stocks within the index ended the session in the green, with Wipro leading the gains, rising 3.9 percent to ₹550 per share. Other strong performers included MphasiS, Coforge, L&T Technology Services, and Persistent Systems were all ended with gains between 1 percent and 2 percent.

Notably, five stocks including MphasiS, Coforge, Persistent Systems, HCL Technologies, and LTIMindtree have reached new 52-week highs during the session. This momentum has propelled the Nifty IT index to a year-to-date gain of 22.19 percent, outpacing the Nifty 50's 16.68 percent rise.

Jewellery stocks do very well 

Jewellery stocks jumped up sharply in today's trade as gold hit new record highs amid global central banks initiating interest rate cuts in response to easing inflation. Stocks including Tribhovandas Bhimji Zaveri (TBZ), Kalyan Jewellers, Senco Gold, Motisons Jewellers, PC Jeweller, and Thangamayil Jewellery saw their shares surge between 4 percent and 20 percent.

For regional jewellery businesses, rising gold prices can be particularly beneficial. These companies often keep a significant portion of their gold inventory unhedged, enabling them to capitalize directly on the price increases through inventory gains.

On the other hand, larger players like Titan and Kalyan Jewellers typically hedge 70 percent to 90 percent of their gold holdings. Despite this, the unhedged portion of their inventories still benefits from rising gold prices.

Jewellery stocks have been performing well recently, supported by multiple factors including a cut in customs duties on gold and silver from the latest Union Budget, increasing wedding jewellery demand, favorable brokerage outlooks, and anticipated strong sales during the upcoming festive season.

(By arrangement with livemint.com)