13 days ago

Nifty 50 Ends Lower as Market Tone Turns Cautious; Pharma and IT Lead Sectoral Gains

The Indian equity market witnessed a broadly subdued performance in the week ending June 13, 2025, as the Nifty 50 index $^NSEI fell by 1.04% to close at 24,718, while Bank Nifty $^NSEBANK retreated by 1.8%, settling at 55,527.35. The decline followed a week of sectoral divergence, where IT (CNXIT) and pharmaceutical stocks outperformed, in contrast to muted action in real estate, autos, FMCG, and metal counters. The weakness extended across broader markets, with mid-cap and small-cap indices both slipping by over 1%, reflecting a risk-off sentiment among retail and institutional investors. Rising bond yields, continued foreign institutional outflows, and mixed global cues contributed to the cautious tone.

Bank Nifty and Midcaps Under Pressure

Banking stocks, which had earlier supported broader index stability, came under pressure amid consolidation in frontline private lenders and waning optimism on credit cycle acceleration. The fall in Bank Nifty signaled potential resistance at higher levels, with notable weakness in HDFC Bank $HDFCBANK.NS, Axis Bank $AXISBANK.NS, and Kotak Mahindra Bank $KOTAKBANK.NS. Simultaneously, mid-cap and small-cap equities showed signs of exhaustion after a multi-week rally. Investors appeared to book profits in higher-beta names across industrials, capital goods, and consumer discretionary segments.

Technical Outlook: Downside Risks if Nifty Breaches 24,500

The technical structure of Nifty 50 continues to reflect near-term vulnerability. According to Amol Athawale, Vice President – Technical Research at Kotak Securities, as long as the index trades below 24,850, bearish sentiment may persist. The recent inability to reclaim this threshold reinforces resistance in the short-term structure.

If the index decisively breaks below the immediate support level of 24,500, it could trigger increased selling momentum, potentially dragging the benchmark down to 24,300, a zone that coincides with short-term Fibonacci retracement levels and rising trendline supports from the March rally.

Sectoral Snapshot: IT and Pharma Provide Relative Strength

In contrast to broad-based pressure, selective sectors displayed resilience, indicating defensive rotation among fund managers:

Information Technology: Benefited from stable U.S. macro data and favorable rupee-dollar dynamics. Companies like Infosys $INFY.NS and TCS $TCS.NS gained on export optimism.
Pharmaceuticals: Continued to attract buying interest amid defensive positioning and strong U.S. generics sales data. Dr. Reddy’s $DRREDDY.NS and Sun Pharma $SUNPHARMA.NS recorded notable upticks.
FMCG and Metals: Traded range-bound as volume growth uncertainty and weak global metal prices capped further upside.
Auto Sector: Saw selective buying in two-wheeler and EV names, though large-cap OEMs remained range-bound.