Sensex, Nifty Close Flat as IT, FMCG and Auto Stocks Drag; Second Straight Weekly Decline

Indian equity benchmarks closed a choppy Friday session almost exactly where they started, with the Sensex and Nifty struggling for direction as elevated crude oil prices and a renewed rise in global bond yields kept investors cautious through the day.

The BSE Sensex inched up just 3.11 points to settle at 77,540.83, while the NSE Nifty50 added 20.15 points, or 0.08 percent, to close at 24,252.00. The muted finish means both benchmarks have now ended lower for a second consecutive week, extending a stretch of range-bound trading that has gripped the market through much of August.

Sectors split as metals and banks offset IT and FMCG weakness

The session's flatness masked a fair amount of movement beneath the surface. The Nifty FMCG, Auto and IT indices all ended in the red, weighing on the broader market, while Nifty Metal and Private Bank emerged as the standout gainers of the day. Trent, Maruti Suzuki India and InterGlobe Aviation were among the biggest drags on the Nifty50, while stronger buying in financial heavyweights and commodity-linked stocks provided a counterbalance.

Broader markets fared somewhat better than the headline indices. The Nifty MidCap index rose about 0.1 percent and the Nifty SmallCap index gained a sharper 0.69 percent, suggesting appetite for smaller names held up even as large-caps stayed rangebound.

Global cues and crude prices weigh on sentiment

Analysts pointed to a mix of external pressures keeping a lid on the rally. Crude oil prices stayed elevated through the week amid simmering tensions between the United States and Iran, a factor that has repeatedly weighed on Indian markets given the country's heavy reliance on imported oil. At the same time, a brief easing in US Treasury yields earlier in the week reversed course, adding fresh caution to risk sentiment globally.

Domestically, hawkish minutes from the Reserve Bank of India's latest monetary policy committee meeting pushed India's benchmark 10-year bond yield to a two-month high, reflecting persistent concerns around local inflation and tighter liquidity conditions. Market watchers noted that strong value-buying in financial stocks, supported by robust credit growth and valuations that look more reasonable after recent corrections, helped cushion the broader market from a steeper fall.

Technical analysts flagged the Nifty's immediate resistance in the 24,370–24,400 zone, which coincides with its 200-day exponential moving average, as the level to watch for a more decisive breakout. On the downside, support was seen in the 24,100–24,130 band.

Institutional flows remained a mixed bag through the week, with foreign investors turning net sellers of Indian equities in the sessions leading up to Friday, even as domestic institutional investors continued to absorb the selling and provide support to the market.

With crude prices and global bond yields likely to remain the key swing factors in the sessions ahead, traders said the market's near-term bias stays cautiously positive but prone to bouts of volatility, especially if geopolitical developments around Iran and the Strait of Hormuz take a turn.

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