Stock markets in mid-afternoon trade: Sensex, Nifty trim initial gains; Tech Mahindra jumps

In the mid-afternoon session, headline indices both Sensex and Nifty pared some of the earlier gains and traded higher  by 0.5 per cent each. At the last count, Sensex traded at 74,743.78, up 361.25 points, while Nifty was up by 111 points at 22,731.3 points. Meanwhile, broader markets continued to perform their headline with Nifty Midcap 100 and Nifty Smallcap 100 gaining up to 3 per cent.

After the poll outcome, the markets have shown remarkable resilience as Narendra Modi is set to take office as the country’s Prime Minister for the third straight term. Following Tuesday’s mayhem which eroded investors’ wealth sharply, Nifty 50 index has recovered by 4.7 per cent at day’s high.

Fisdom in its report highlighted that one cannot keep the strong fundamentals of the country from influencing the market for long.

From the Nifty pack, top gainers included stocks like Tech Mahindra, Shriram Finance, HCL Technologies, Infosys and SBI, while laggards have been Hindalco, HUL, Hero MotoCorp, M&M and Cipla.

V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services remarked that the global construct has turned favourable with rising possibility of rate cuts by the Fed after the recent data that showed weakness in the US labour market.

The gains on the D-Street come even as FIIs continue to sell amid high valuations in India in comparison to Chinese stocks. In the previous session, FIIs net sold Indian equities worth Rs 5,656.26 crore.

Sectorally, IT, Realty, PSU Bank and energy led the gains, with Nifty Realty surging the most by as much as 4 per cent. The IT pack is buzzing in trade today after NVIDIA on Wednesday (June 5, 2024) pipped Apple to become the world's second most valuable company commanding a market-cap of $3 trillion market cap on Wednesday.

In the near-term we have political stability but political developments will continue to weigh on markets. A concern in the market is that the BJP’s dependence on allies might put economic reforms on the back burner impacting growth and thereby corporate earnings in the long run, added Vijaykumar.