Markets end flat as investors turn cautious after recent rally
Benchmarks closed nearly unchanged on Tuesday as investors adopted a cautious stance following the recent rally, with the Sensex declining 53.49 points or 0.06 per cent to end at 82,391.72 and the Nifty 50 closing marginally higher by 1.05 points at 25,104.25.
Despite opening with a significant gap-up, with the Sensex starting at 82,643.73 and Nifty at 25,196.05, both indices were unable to sustain higher levels and moved sideways throughout the session.
The market witnessed mixed sectoral performance, with IT, pharma, and energy sectors emerging as gainers while banking and realty remained under pressure.
“Domestic equity benchmarks traded within a narrow range as investors adopted a cautious approach following the recent rally driven by favourable domestic macroeconomic indicators and concerns over stretched valuations,” said Vinod Nair, Head of Research at Geojit Investments Limited. “However, the overall sentiments remained on the positive side on account of optimism around U.S.-China trade negotiations.”
Among individual stocks, Grasim Industries led the gainers on Nifty 50, surging 3.66 per cent to close at ₹2,704.00, followed by Tech Mahindra which gained 2.14 per cent to ₹1,612.90. Dr Reddy’s Laboratories advanced 2.10 per cent to ₹1,346.80, while Tata Motors climbed 2.08 per cent to ₹732.70. Adani Enterprises and HCL Technologies also posted gains of 1.39 per cent and 1.36 per cent respectively, closing at ₹2,618.00 and ₹1,670.70.
On the downside, Trent was the top loser, declining 1.65 per cent to ₹5,816.00. Maruti Suzuki fell 1.31 per cent to ₹12,472.00, while Bajaj Finance dropped 1.22 per cent to ₹9,490.00. Tata Steel and Bajaj Finserv also declined, falling 1.06 per cent and 0.99 per cent to ₹155.65 and ₹1,997.50 respectively.
Sectoral indices showed divergent trends, with the Nifty IT index gaining 1.7 per cent as a firm U.S. dollar acted as a tailwind for export-oriented sectors. The media and power indices also gained nearly 1 per cent, while the realty index was down 1 per cent. The Nifty Bank declined 0.37 per cent to 56,629.10, and Nifty Financial Services fell 0.47 per cent to 26,867.05.
“Markets traded in a lackluster manner and ended almost unchanged, taking a breather after the recent surge,” said Ajit Mishra, SVP Research at Religare Broking Ltd. “Following an initial gap-up opening, Nifty quickly gave up its gains and moved in a narrow range for the rest of the session.”
Broader markets showed resilience, with the Nifty Midcap 100 advancing marginally by 0.01 per cent to 59,681.40, while smallcaps outperformed with the Nifty Smallcap 100 gaining 0.14 per cent. Market breadth was positive with 2,232 stocks advancing against 1,805 declining stocks on the BSE, while 135 remained unchanged. A total of 137 stocks hit 52-week highs compared to 33 that touched 52-week lows.
“Despite the lack of momentum in largecaps, broader markets held their ground, with smallcaps outperforming,” noted Vikram Kasat, Head – Advisory at PL Capital. “Consolidation is the current mood, but improving liquidity, resilient earnings, and FPI interest keep the bulls hopeful.”
The India VIX declined 4.61 per cent to 14.0150, indicating reduced market volatility and stable sentiment among traders. Open Interest data showed the highest concentration on the call side at 25,200 and 25,300 strike prices, indicating strong resistance at these levels, while significant put OI build-up was observed at 25,000 and 24,900 strike prices.
Currency markets saw the rupee trading flat to positive near 85.67 levels. “Rupee traded flat to positive near 85.67 as last week’s RBI’s 0.50 per cent rate cut with overall 100bps adds liquidity offsetting pressure from rising crude oil prices over the past week,” said Jateen Trivedi, VP Research Analyst at LKP Securities. “The US CPI data due this week will be a key driver for the dollar index, with the rupee expected to remain range-bound between 85.25 and 86.00.”
Gold prices remained range-bound near $3,315-3,320 and ₹97,000 as market participants await U.S.-China trade talks updates. “A strong tariff deal with both on positive agreements shall push Gold lower towards 95000, whereas any dissatisfied comments can take price higher towards 98500rs and 3360$ odd,” Trivedi added.
Technical analysts remain cautiously optimistic about the market’s near-term prospects. “The Nifty has sustained above the previous consolidation zone on the daily timeframe, indicating a continuation of the uptrend,” said Rupak De, Senior Technical Analyst at LKP Securities. “The sentiment favour long trades as long as the index remains above the key support level of 24,850.”
Looking ahead, market participants will closely monitor the upcoming U.S. CPI data and developments in U.S.-China trade negotiations, which are expected to drive market sentiment in the coming sessions. Analysts suggest maintaining a disciplined approach with strict risk controls given the prevailing global uncertainties and event-driven risks.
Published on June 10, 2025
