For investors trying to navigate the Indian stock market, Friday's session was a classic tug-of-war. After a sharp morning sell-off, the benchmark indices staged a recovery but ultimately closed the tumultuous week on a flat note. This guide breaks down what caused the intense volatility, which sectors came under pressure, which continued to rally, and what the overall weekly performance signals for the market ahead.
Table of Contents
- How Did the Stock Market Perform Today?
- What Caused the Market's Tug-of-War?
- Which Sectors and Stocks Were in the Spotlight?
- How Did the Market Perform for the Week?
- What Are Institutional Investors Doing?
- What Cues Are Coming from Global Markets?
- Frequently Asked Questions (FAQs)
How Did the Stock Market Perform Today?
The market swung between losses and gains before settling with a mixed close, reflecting deep indecision among investors.
-
S&P BSE Sensex: Closed virtually unchanged, down by just 7.25 points (0.01%) at 80,710.76.
-
NSE Nifty 50: Managed to close in the green, inching up by 6.70 points (0.03%) to settle at 24,741.00, successfully holding the crucial 24,700 level.
The session was marked by a strong recovery from early lows, but the indices lacked the momentum to push significantly higher.
What Caused the Market's Tug-of-War?
The market was pulled in opposite directions by two powerful forces:
-
Profit-Booking in Heavyweights: After a strong rally earlier in the week following positive GST news, heavyweight sectors like FMCG and IT faced significant selling pressure. Investors chose to book profits in stocks like ITC and TCS, which dragged the headline indices down.
-
Continued Strength in the Auto Sector: On the other hand, the auto sector continued its powerful rally, fuelled by optimism over the recent GST rate cuts. Strong buying interest in stocks like M&M and Eicher Motors provided crucial support to the market and prevented a steeper decline.
Which Sectors and Stocks Were in the Spotlight?
The sectoral performance painted a clear picture of the day's divided sentiment.
-
Top Gaining Sector: The Nifty Auto index was the standout performer, rising by 1.3%.
-
Top Losing Sectors: The Nifty Realty, Nifty FMCG, and Nifty IT indices were the biggest laggards, each falling by around 1%.
Top Gaining and Losing Stocks on Nifty 50:
| Top Gainers |
Top Losers |
| Mahindra & Mahindra (M&M) |
ITC |
| Eicher Motors |
TCS |
| Maruti Suzuki |
Cipla |
| Dr. Reddy's Laboratories |
HCL Technologies |
| Power Grid |
Persistent Systems |
How Did the Market Perform for the Week?
Despite the flat close on Friday, the week was positive for the Indian market, which regained most of the previous week's losses.
-
Weekly Gains: Both the Sensex and Nifty rose by over 1% for the week.
-
Top Weekly Performers: The rally was led by sectors that benefited most from the GST reforms. The Nifty Metal index surged by 5.75%, and the Nifty Auto index rallied by 5.45%, making them the top sectoral performers for the week.
-
Weekly Laggard: The IT sector was the only one to end the week with losses.
What Are Institutional Investors Doing?
The trend of domestic institutions supporting the market against foreign selling continued on Friday.
-
Foreign Institutional Investors (FIIs): Remained net sellers, offloading equities worth ₹1,304.91 crore.
-
Domestic Institutional Investors (DIIs): Acted as a cushion, making net purchases of equities worth ₹1,644.85 crore.
What Cues Are Coming from Global Markets?
Global markets turned cautious after fresh U.S. economic data. Wall Street indices closed lower after a report showed that U.S. job growth had slowed significantly in August. This news has created a dual narrative for investors: it fuels worries about a potential economic slowdown but also increases expectations that the U.S. Federal Reserve might be prompted to cut interest rates sooner.
Frequently Asked Questions (FAQs)
Q1: Why was the Indian stock market so volatile and why did it close flat?
A1: The market closed flat because of a tug-of-war between sectors. Strong buying continued in auto stocks following the GST rate cuts, pushing the market up. However, heavy profit-booking in the heavyweight IT and FMCG sectors after their recent rally pulled the market down, resulting in a stalemate.
Q2: Which sector was the best performer this week and why?
A2: The Nifty Metal index was the best performer this week, surging by 5.75%, followed closely by the Nifty Auto index, which rose 5.45%. Both sectors were major beneficiaries of the recent GST Council reforms, which boosted investor sentiment.
Q3: Are foreign investors buying or selling in India?
A3: As of September 5, Foreign Institutional Investors (FIIs) were net sellers in the Indian market. However, their selling was more than absorbed by strong net buying from Domestic Institutional Investors (DIIs), who continue to provide robust support.
Q4: What does the weak US jobs data mean for the Indian market?
A4: The weak U.S. jobs report has a mixed implication. On one hand, it signals a slowing U.S. economy, which can be a negative for global growth. On the other hand, it increases the probability of an interest rate cut by the U.S. Federal Reserve, which could boost liquidity and be positive for emerging markets like India.
Q5: How did the auto and FMCG sectors perform today?
A5: The Nifty Auto index was the top gainer, rising 1.3% as it continued its post-GST rally. In contrast, the Nifty FMCG index was one of the biggest laggards, falling nearly 2% as investors booked profits in stocks like ITC that had surged earlier in the week.