• Indian equity indices Sensex and Nifty closed in the red despite positive market sentiment.
• The decline was driven by the performance of shares from Reliance and Nestle.
• Despite the overall decline, the market capitalization of all companies listed on the BSE increased.
• Buying was seen in midcap and smallcap stocks, indicating investors were looking for opportunities in smaller companies.

The Indian frontline equity indices, in an unexpected turn of events, closed in the red on Wednesday, September 10, 2024. This occurred despite a positive market sentiment. The Sensex and Nifty, two of the country's leading indices, saw a decline in their closing points.

The Sensex closed at 81,467, down by 167 points or 0.21%, and the Nifty closed at 24,981, down by 31 points or 0.12%.

This decline was primarily driven by the performance of shares from Reliance and Nestle, which pulled the indices lower. Despite the overall decline, the Bombay Stock Exchange (BSE) saw 2,706 shares close in the green, while 1,246 shares closed in the red, and 97 shares remained unchanged. This indicates a mixed performance across the market, with some stocks performing well despite the overall decline.

The market capitalization of all companies listed on the BSE was Rs 462 lakh crore at the end of the day, a slight increase from Rs 459 lakh crore on the previous day, Tuesday. This suggests that despite the decline in the Sensex and Nifty, the overall value of the market increased, indicating a positive market sentiment.

Top Gainers and Losers

Among the stocks listed on the Sensex, several emerged as top gainers, including Tata Motors, Tech Mahindra, SBI, Maruti Suzuki, Bajaj Finserv, Bajaj Finance, Axis Bank, Bharti Airtel, HCL Tech, Wipro, Power Grid, Sun Pharma, ICICI Bank, Infosys, and TCS. On the other hand, ITC, Nestle, HUL, Reliance, IndusInd Bank, L&T, HDFC Bank, NTPC, M&M, Tata Steel, Asian Paints, and JSW Steel were the top losers.

Interestingly, despite the overall decline in the Sensex and Nifty, buying was seen in the midcap and smallcap stocks. The Nifty midcap 100 index closed at 59,102, up by 566 points or 0.97%, and the Nifty smallcap 100 index closed at 18,864, up by 246 points or 1.33%. This suggests that investors were looking for opportunities in smaller companies, possibly due to their potential for higher returns.

Among the various sectors, auto, IT, PSU Bank, financial services, pharma, realty, and media contributed the most to the market's performance. In contrast, FMCG, energy, private bank, and commodity sectors fell the most. This indicates a shift in investor preference towards sectors that are expected to perform well in the current market conditions.

Analyst's Take on the Market Performance

Rupak De, Senior Technical Analyst at LKP Securities, provided his insights on the market's performance. He stated, "The Nifty opened higher but struggled to maintain gains, leading to a weaker close. On the hourly chart, the index closed just above the 20DMA, indicating that the very short-term trend remains positive and is likely to stay so as long as it holds above 24,940." He further added, However, a drop below 24,940 could trigger a correction down to 24,800/24,700. On the upside, 25,100 may act as resistance.

This event is reminiscent of similar occurrences in the past where the market has shown a decline despite a positive sentiment. For instance, in 2008, during the global financial crisis, the Indian market experienced a similar trend where the indices closed in the red despite positive sentiments. This was primarily due to global factors that had a significant impact on the Indian market.