Sensex, Nifty50 inch lower amid choppy trade; HUL weighs on FMCG basket

Domestic equity benchmarks moved in a narrow range around the flatline amid choppy trade on Thursday, as losses in FMCG and IT stocks offset gains in financial shares. By midday, both main indices were largely flat, with the Sensex trading 43 points, or 0.1 per cent, lower at 80,038 and the Nifty down 28 points, or 0.1 per cent, at 24,407. Among heavyweights, Hindustan Unilever Ltd (HUL) weighed heavily on the Sensex and Nifty, plummeting more than after the FMCG giant reported a weaker-than-expected set of quarterly results. The stock contributed to a fall of more than 2 per cent in the FMCG index. 

Despite the downtrend, financial stocks offered some respite. The Nifty Bank index rose 0.7 per cent, driven by gains in major players like HDFC Bank and SBI, helping to counterbalance the losses. UltraTech Cement and Grasim also led the gains in the cement sector, lending some stability to the indices.

The broader market displayed a mixed trend, with the BSE Midcap edging up 0.2 per cent while the BSE Smallcap stayed flat. However, the overall market sentiment remained cautious, with more shares declining (1,712) than advancing (1,528), and 99 stocks remaining unchanged by 11:30 am.

Nifty has already shed nearly 2 per cent in the last three sessions, and it is now down 7 per cent from its record high on September 27. This decline has been mainly driven by consistent foreign selling and weaker-than-expected corporate earnings. Foreign institutional investors (FIIs) have been net sellers for 18 consecutive sessions, shifting their focus to Chinese markets, which have become more attractive due to stimulus measures and lower valuations.

In the sectoral space, Hindalco led the decline in the metals sector, falling nearly 4 per cent as demand concerns weighed on the stock. On the other hand, stocks like UltraTech Cement, HDFC Bank, and Tata Motors helped limit the broader market’s losses.

Looking forward, analysts remain cautious, citing FII outflows and sluggish earnings as major headwinds for the Indian market. Despite short-term gains in select financials and cement stocks, the broader sentiment is likely to remain under pressure until corporate earnings improve or FII selling eases.

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