Profit Booking in Financials Drags Markets; Small-Caps Outperform Amid Mixed Sentiment

As of 12:17 p.m. IST, the Nifty 50 was down 0.19 per cent at 25,590.45, while the Sensex declined 0.22 per cent to 83,876.90.

Market Update at 12:15 PM: India’s key stock indexes slipped in early trade on Monday as investors booked profits in financial shares after recent highs, despite a supportive backdrop of easing geopolitical risks and renewed foreign investments.

As of 12:17 p.m. IST, the Nifty 50 was down 0.19 per cent at 25,590.45, while the Sensex declined 0.22 per cent to 83,876.90. Out of the 13 key sectoral indices, seven recorded losses, with the financial sector—having recently touched record highs—falling by 0.4 per cent. HDFC Bank, a major component of both indices, dropped around 0.8 per cent.

In contrast, the small- and Mid-Cap indices fared better, posting gains of 0.5 per cent and 0.3 per cent, respectively. Both the Sensex and Nifty remain close to their all-time highs, just 2.5 per cent shy, having risen approximately 3.5 per cent in June and around 15 per cent since March.

Asian equities remained mostly flat, while the U.S. dollar softened on expectations that weaker job numbers might lead to more aggressive rate cuts.

In stock-specific action, Karnataka Bank slumped 7 per cent following the resignations of CEO Srikrishnan Hari Hara Sarma and Executive Director Sekhar Rao. Meanwhile, Alembic Pharma surged 9.5 per cent after receiving U.S. FDA approval for a cancer treatment injection. ITD Cementation advanced 4.1 per cent after winning a USD 67.4 million marine infrastructure order, and Torrent Pharma initially rallied 4 per cent before trimming gains after announcing the acquisition of a 46.4 per cent stake in JB Chemicals.

Market Update at 10:00 AM: India’s equity markets began the week on a steady note, showing little movement after last week’s strong performance, which was supported by easing geopolitical concerns, positive global cues, and renewed foreign investment.

At 9:25 a.m. IST, the Nifty 50 was nearly unchanged, slipping marginally by 0.01 per cent to 25,637, while the BSE Sensex edged down 0.05 per cent to 84,024.65.

Though several sectors saw gains, they were largely offset by profit booking in financial and automobile stocks. On the other hand, the broader market showed strength, with the Nifty Smallcap and Nifty Midcap indices climbing 0.8 per cent and 0.4 per cent, respectively.

Meanwhile, Asian equities also remained quiet, and the U.S. dollar weakened as expectations grew for deeper rate cuts following softer-than-expected U.S. employment data.

Last week, both the Sensex and Nifty ended higher, driven mainly by gains in financial and metal stocks, and are currently trading around 2.5 per cent below their all-time highs from September.

Pre-Market Update at 8:00 AM: Indian equity benchmarks, the Nifty 50 and Sensex, are expected to open higher on Monday, June 30, following upbeat cues from global markets.

At 7:15 AM, the GIFT Nifty hovered around 25,768—just 11 points lower than its previous close—signalling a mildly positive to flat start for domestic markets.

Asian markets opened strong, tracking gains from Wall Street, where all three major US indices ended last week in the green. This global momentum is expected to support sentiment back home.

Investors will closely watch developments such as updates on US-China trade negotiations, ongoing geopolitical events like the Israel-Iran situation, the launch of fresh IPOs, the activity of institutional investors, global crude oil price fluctuations, and macroeconomic indicators from both domestic and international fronts.

Foreign Institutional Investors (FIIs) returned as net buyers over the last two sessions, while Domestic Institutional Investors (DIIs) turned net sellers. On Friday, June 27, FIIs purchased equities worth Rs 1,397.02 crore, while DIIs offloaded shares worth Rs 588.93 crore.

Indian stock markets extended their winning streak for the fourth straight session. The Nifty 50 moved past the 25,600 mark, adding 88.80 points (0.35 per cent) to close at 25,637.80. The Sensex rose by 303.03 points (0.36 per cent), settling at 84,058.90.

Asian indices started the week positively. Japan’s Nikkei 225 climbed 1.68 per cent, with the Topix advancing 0.96 per cent. South Korea’s Kospi was up 0.85 per cent, while the Kosdaq remained largely unchanged. Investors across Asia remain focused on trade talks and key economic data.

Japan’s factory output in May rose 0.5 per cent from April, falling short of the expected 3.5 per cent rise. Manufacturers estimate a marginal 0.3 per cent uptick in June followed by a 0.7 per cent dip in July.

US equity markets ended Friday’s session at record levels. The Dow surged 432.43 points (1 per cent) to 43,819.27, while the S&P 500 climbed 32.05 points (0.52 per cent) to 6,173.07. The Nasdaq added 105.55 points (0.52 per cent) to close at 20,273.46. All three indices posted weekly gains.

The US Personal Consumption Expenditures (PCE) Price Index rose 0.1 per cent in May, matching April’s pace. On a yearly basis, it stood at 2.3 per cent in May, up slightly from 2.2 per cent in April. However, consumer spending in May dipped unexpectedly by 0.1 per cent, following a 0.2 per cent increase in April.

US Treasury Secretary Scott Bessent reported headway in trade discussions with China, particularly in rare earth materials and magnets. He also mentioned that trade deals with 18 key countries may be finalised by September 1.

Crude prices declined due to easing Middle East tensions and speculation of a production hike by OPEC. Brent fell 0.97 per cent to USD 67.11/barrel, while WTI slipped 1.31 per cent to USD 64.66/barrel.

Gold prices dropped to a one-month low as improving US-China relations weakened demand for safe-haven assets. Spot gold declined 0.3 per cent to USD 3,264.64/oz, marking its lowest since May 29.

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Disclaimer: The article is for informational purposes only and not investment advice.