The benchmark indices ended the session in the red on Wednesday, giving up early advances as pressure in financial counters dragged overall sentiment lower. The Sensex slipped by 206.61 points to close at 80,157.88, while the Nifty50 declined by 45.45 points to finish at 24,579.60.
Earlier in the day, both indices had risen nearly half a percent, but gains were trimmed during afternoon trade. Market participants pointed out that unwinding in financial stocks, which carry heavy weightage in the Nifty, played a key role in the decline. The shift in the NSE’s weekly derivatives expiry from Thursday to Tuesday, effective September 2, also added an element of volatility. Financial stocks, which were in the green during the morning, ended 0.7% lower by close.
Vinod Nair, Head of Research at Geojit Financial Services, explained that the reversal was largely driven by profit booking. Despite encouraging macroeconomic indicators, investors adopted a cautious approach ahead of the GST Council meeting and the F&O expiry. Banking stocks led the losses, dragging the indices down from earlier highs.
On the positive side, sugar stocks attracted strong buying interest after ethanol norms were relaxed, fueling a sectoral rally. Export-oriented companies also advanced following dovish commentary from the United States, which reignited optimism about global trade. Still, analysts noted that investors remain watchful, with near-term market direction expected to hinge on domestic consumption trends amid lingering global uncertainties.
Consumer-focused stocks showed resilience, with expectations of GST rate cuts boosting sentiment. The Nifty FMCG index climbed 0.8%, led by notable gains in Nestle India, Hindustan Unilever, Dabur, and Emami, which rose between 1% and 4%. The upcoming GST Council meeting on September 3–4 is anticipated to take up proposals for lowering tax rates by at least 10 percentage points across roughly 175 products, including items like shampoos, hybrid cars, and electronics.
Energy shares also lent support, highlighted by Reliance Industries, which advanced 1%, helping push the Nifty Energy index up by an equal margin. Morgan Stanley’s upward revision of Reliance’s price target added to the bullish momentum, citing gains that could accrue from China’s policy drive to reduce excess industrial capacity and avoid price competition in the energy and solar supply chain.
By the end of the session, nine out of the sixteen key sectoral indices were trading higher. Broader markets displayed relative strength as well, with both the mid-cap and small-cap indices rising 0.3% each, outpacing the performance of the frontline benchmarks.
