Markets end flat amid Middle East tensions, Fed caution weighs on investors' sentiment

Mumbai (Maharashtra) [India], June 19 : India's equity benchmarks remained muted on Thursday and ended with a marginal loss, possibly due to the ongoing geopolitical conflict in the Middle East and cautious signals from the US Federal Reserve, dampening investors' sentiment.

At the end of the trading session on Thursday, BSE Sensex settled at 81,361.87, slipping 82.79 points or 0.10 per cent, while Nifty 50 at National Stock Exchange (NSE) was down 18.80 points or 0.08 per cent at 24,793.25

Within the Nifty constituents, Tata Consumer, Eicher Motors, and Mahindra & Mahindra emerged as the top performers, offering some pockets of strength. In contrast, Adani Ports and Bajaj Finance weighed on the index, ending as top laggards.

From a sectoral perspective, Nifty Auto stood out as the sole gainer, while all other sectoral indices closed in the red. Nifty PSU Bank and Nifty Media were the top losers.

The market breadth remained extremely weak, as evident from the advance-decline ratio skewed heavily in favour of decliners. Out of the Nifty 500 universe, only 61 stocks managed to end in green, while a staggering 438 stocks closed lower, signalling deep-rooted selling pressure across the board.

Observing the market sentiment, Sudeep Shah, Head - Technical Research and Derivatives at SBI Securities said, "With major indices failing to show leadership and broader markets losing key supports, the overall structure remains fragile, and a decisive trigger is needed to break the prevailing range-bound phase."

"The Indian market is currently in a state of indecision due to various macroeconomic factors. This uncertainty is also reflected in recent price movements, as Nifty formed a Doji high wave pattern on the daily timeframe," said VLA Ambala, Co-Founder of Stock Market Today.

She added, "The Fed's decision not to change interest rates represents a contrasting approach compared to the RBI and the government, who are confident about India's trade deals and the performance of the INR. However, market momentum and macroeconomic factors suggest that we remain vigilant. Any increase in inflationary pressure or signs of recession could cast a shadow over our markets."

The banking benchmark index, Bank Nifty, slipped into negative territory on Thursday, mirroring the broader market's lacklustre tone.

However, for the third straight session, the banking benchmark has remained confined within a narrow trading range of 56067 to 55511, highlighting a phase of low volatility and indecision.

Amid the uncertain conditions, broader market volatility remains moderate. India VIX is currently at 14.26, reflecting volatile investor sentiment.

However, analysis suggests that an increase in volatility in the upcoming sessions is expected.

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