Sensex, Nifty slip on profit-taking; gold hits record high

Indian benchmark indices closed marginally lower on Friday, retreating from earlier gains as profit-taking emerged in select sectors. The BSE Sensex ended at 82,890.94, down 71.77 points or 0.09 per cent, while the NSE Nifty 50 fell 32.40 points or 0.13 per cent to close at 25,356.50. Despite the day’s marginal losses, both indices posted strong weekly gains, with the Nifty-50 and Sensex-30 advancing nearly 2 per cent over the past five sessions.

The day’s trading saw mixed performance across sectors, with Realty, Media, and PSU Banking indices closing over 1 per cent higher. However, profit-booking in energy and FMCG stocks weighed on overall market sentiment. The BSE Energy and BSE Oil & Gas indices were notable underperformers for the week.

Among the Nifty 50 constituents, Wipro emerged as the top gainer, surging 3.78 per cent. Bajaj Finserv and Bajaj Finance followed, rising 2.33 per cent and 2.26 per cent respectively, buoyed by positive sentiment ahead of the Bajaj Housing listing. Grasim Industries and IndusInd Bank rounded out the top five gainers, adding 1.34 per cent and 1.33 per cent each.

On the flip side, SBI Life led the losers, declining 1.65 per cent. Adani Ports shed 1.43 per cent, while HDFC Life, ITC, and Coal India fell 1.34 per cent, 1.13 per cent, and 1.08 per cent respectively. Notably, Adani Enterprises and Adani Ports remained relatively unchanged despite new allegations of money laundering, with the Adani Group clarifying that it is not involved in any Swiss court proceedings.

The broader market showed resilience, with 2,479 stocks advancing against 1,476 declines on the BSE. Notably, 327 stocks hit 52-week highs, while only 27 touched 52-week lows. The market breadth remained positive, with 411 stocks hitting the upper circuit compared to 181 hitting the lower circuit.

Vikram Kasat, Head – Advisory at PL Capital – Prabhudas Lilladher, commented on the day’s trading: “The indices experienced some volatility, reflecting profit-taking and cautious sentiment after the market’s significant gains earlier in the year. While both indices had posted strong performances throughout much of 2024, concerns over global economic conditions have triggered some recent corrections.”

The market’s performance comes against the backdrop of strong foreign portfolio investor (FPI) inflows and growing expectations of a Federal Reserve rate cut. Shrikant Chouhan, Head of Equity Research at Kotak Securities, noted: “Comfortable domestic inflation and benign global conditions should provide leeway to the RBI. In Europe, the ECB lowered its deposit rate by 25 basis points to 3.50 per cent.”

Oil prices rose on Friday due to production disruptions in the U.S. Gulf of Mexico caused by Hurricane Francine. Kaynat Chainwala, AVP-Commodity Research at Kotak Securities, reported: “WTI crude oil prices rose by 2.4 per cent yesterday, driven by significant supply disruptions caused by Hurricane Francine. According to the Bureau of Safety and Environmental Enforcement, energy producers have shut in 730,000 barrels per day of oil production and nearly 992 million cubic feet of natural gas from Gulf waters.”

Gold hits record high

Meanwhile, gold prices soared to a record high of $2,596 per ounce, driven by lower U.S. inflation and rising geopolitical tensions. Chainwala added: “Comex Gold prices reached a new all-time high of $2,596 an ounce on Friday, fueled by the weakening dollar, as investors anticipated an interest rate cut by the Fed next week.”

Looking ahead, Ajit Mishra, SVP of Research at Religare Broking Ltd, remains optimistic: “We remain bullish and recommend using any interim dips to accumulate high-quality large-cap and large mid-cap stocks. The swift recovery in U.S. markets, along with the recent uptick in foreign inflows, is driving this upward movement.”

Ameya Ranadive, Sr Technical Analyst at StoxBox, provided a technical perspective: “The 50 index started the trading week on a slow note but managed to rally 504 points to close in the upper quartile of the weekly trading range. This positive price action negated the bearish engulfing pattern formed on the weekly chart in the previous week, which typically indicates a temporary peak.”

Amol Athawale, VP-Technical Research at Kotak Securities, offered additional technical insights: “Technically, on weekly charts, it has formed long bullish candle and on intraday charts, it is holding higher bottom formation, which is largely positive. We are of the view that, the short-term market texture is positive but due to temporary overbought conditions, we could see range bound price action in the near future.”

As the market heads into next week, all eyes will be on the upcoming U.S. Federal Reserve meeting and its potential impact on global equity markets. Additionally, investors will closely monitor developments in India’s election season, which is expected to significantly shape market sentiment in the coming months. The focus will also be on key economic indicators, including the University of Michigan’s Consumer Sentiment Index and inflation expectations, which could provide further insights into the U.S. economy and its potential impact on the Fed’s decision.