Sensex and Nifty Close with Slight Gains, Realty Sector Outperforms

The Indian stock market ended Wednesday's trading session with slight gains, as the NSE Nifty 50 index rose 0.15% to settle at 22,402.40 and the BSE Sensex jumped 0.16% to 73,852.94. The broader indices showed mixed performance, with mid-cap and small-cap stocks outperforming the frontline indices.

The market breadth favored gainers, with about 2,217 shares advancing and 1,424 declining. The realty sector emerged as the top performer, while the metals sector underperformed. Key gainers on the Nifty 50 included Hindalco Industries, Cipla, JSW Steel, and Tata Steel, while Tata Consumers Products, Grasim, and Bajaj Auto were among the laggards.

Analysts noted that the Indian markets lagged Asian peers due to subdued Q4 earnings, particularly in the IT sector, but were buoyed by strong manufacturing and service sectors, as reflected in the high composite PMI. "The Indian market lagged its Asian peers, as March quarter earnings have largely been subdued, particularly in the IT and some index heavyweight sectors," said an analyst.

Globally, investor sentiment improved with easing tensions in the Middle East and declining oil prices. European and Asian stocks advanced, following the rally in Wall Street. However, concerns were raised about India's household debt reaching a record high of 39.1% of GDP, driven by non-housing debt and low-income families borrowing due to the pandemic, despite a rise in GDP and corporate borrowings being at a 15-year low.

Why this matters: The Indian stock market's performance and sectoral trends provide insights into the country's economic health and investor sentiment. The record high household debt raises concerns about financial savings and potential economic decline, highlighting the need for policy measures to address the issue.

The short-term sentiment for the Nifty remains positive, with immediate resistance at 22,500 and support at 22,350-22,400. The Bank Nifty also has an immediate resistance at 48,500, and a decisive breakthrough could signal a move towards 49,500/50,000 levels. Analysts attributed the market's reversal of the falling trend to the easing of tensions and investors' expectation of the Modi government winning a third successive term, despite FII selling and uninspiring Q4 results from frontline IT companies.

Key Takeaways

• Indian stocks ended with slight gains; Nifty 50 up 0.15%, Sensex up 0.16%.
• Mid-cap and small-cap stocks outperformed frontline indices; realty sector topped.
• Indian markets lagged Asian peers due to subdued Q4 earnings, especially in IT.
• Household debt reached a record high of 39.1% of GDP, raising economic concerns.
• Short-term sentiment remains positive, with Nifty resistance at 22,500 and support at 22,350-22,400.