IT stocks, Reliance drag markets lower at midday; Pharma outperforms as Fed decision looms

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Equity benchmarks pared some of their early losses by mid-session on Wednesday but remained firmly in the red, with information technology stocks and Reliance Industries continuing to weigh on sentiment even as broader markets and select defensives held their ground.

The Sensex was trading at 73,136.56, down 462.11 points or 0.63 per cent, at 12.37 pm, after opening at 73,253.44 against Tuesday’s close of 73,598.67. The Nifty 50 was at 22,668.35, down 81.40 points or 0.36 per cent, having opened at 22,678.00 against a previous close of 22,749.75.

The session has been marked by choppy price action. ...”The frontline indices opened with a gap down and extended their losses initially before attracting buying interest at lower levels. Sharp selling pressure in heavyweight IT stocks and Reliance Industries is weighing on sentiment,”... SBI Securities said in its mid-market update.

The market intelligence firm noted that Nifty Pharma is the best-performing sectoral index of the session, while Nifty IT remains the worst. On the Nifty, the 22,460–22,480 band is acting as crucial support, with resistance in the 22,770–22,790 zone. For the Sensex, support lies at 72,600 and resistance at 73,500.

On the Nifty 50 gainers’ board, Larsen & Toubro retained its position as the top performer, up 4.21 per cent from a previous close of ₹3,665.10 to ₹3,819.50, with volume surging to 42.62 lakh shares valued at ₹1,63,287.99 lakh. Apollo Hospitals rose 3.38 per cent, from ₹7,791.50 to ₹8,055.00, on volumes of 4.33 lakh shares. SBI Life Insurance gained 1.94 per cent from ₹1,633.00 to ₹1,664.60. InterGlobe Aviation (IndiGo) advanced 1.51 per cent from ₹4,596.50 to ₹4,665.80, while BSE Ltd rose 1.42 per cent from ₹3,441.10 to ₹3,489.90.

On the losers’ front, Infosys led the decline, falling 3.82 per cent from a previous close of ₹1,163.00 to ₹1,118.60, with a massive 87.77 lakh shares changing hands valued at ₹97,560.97 lakh. State-run oil producer ONGC dropped 2.45 per cent from ₹229.85 to ₹224.23. Tata Consultancy Services slipped 2.13 per cent from ₹2,496.90 to ₹2,443.80. Reliance Industries fell 1.96 per cent from ₹1,196.20 to ₹1,172.70 on enormous volumes of 97.25 lakh shares worth ₹1,15,143.23 lakh, making it among the most actively traded stocks of the session. Tech Mahindra shed 1.93 per cent from ₹1,811.40 to ₹1,776.40.

...”Indian equities came under pressure after opening cautiously, with broad-based selling eroding some of the market’s recent gains. Information technology stocks led the decline, falling more than 3 per cent in early trade, while FMCG and oil and gas shares shed over 1 per cent each,”... said Ponmudi R, CEO of Enrich Money. ...”The weakness across key sectors points to subdued risk appetite, as investors remain wary of external headwinds and the prospects for a sustained market recovery,”... he added.

Despite the benchmark weakness, market breadth on the BSE told a more constructive story. Of 4,316 stocks traded, 2,945 advanced against 1,140 declines, with 231 unchanged. The advance-decline ratio of nearly 2.6:1 underlined the relative resilience of the broader market, even as the Nifty’s own advance-decline ratio stood at a narrower 20:30. A total of 57 stocks hit 52-week highs during the session, compared with 139 touching 52-week lows. Stocks in upper circuit numbered 179, against 169 in lower circuit. ...”Broader markets continue to demonstrate relative strength, outperforming the benchmark indices,”... SBI Securities noted.

On the commodities front, MCX crude oil opened with a gap higher near ₹9,634 and was trading around ₹9,641, up 1.51 per cent, with support at ₹9,500–9,600 and immediate resistance at ₹9,900–10,000. WTI crude was near $101.20, up 1.02 per cent, after buyers defended the $99–100 support zone in the previous session. ...”Geopolitical risks continue to complicate the outlook, with President Trump suggesting that strikes on Iran could resume after the election, and attacks on commercial shipping near the Strait of Hormuz reportedly reaching their highest level since 2017,”... Enrich Money said in its commodities update. Brent’s prompt spread remains in steep backwardation, reflecting tight near-term supply conditions.

COMEX gold futures eased to around $4,060, down 0.37 per cent, after Tuesday’s rebound stalled at the $4,070–4,100 resistance zone, as a firmer dollar and a 10-year US Treasury yield holding near 4.99 per cent capped gains. MCX gold was trading around ₹1,43,640, down 0.34 per cent, back inside the ₹1,43,000–1,43,700 band. ...”The rupee’s recovery to around 95.01 against the dollar is beginning to reduce the support that its earlier weakness had provided to domestic bullion prices,”... Enrich Money observed. COMEX silver was near $54.20, down 0.58 per cent, with its RSI near 31 approaching oversold territory. MCX silver was around ₹1,95,410, down 0.66 per cent, with its RSI deeply oversold near 25. ...”Silver has declined nearly three times as much as gold this month, lifting the gold-silver ratio to around 73:1 as elevated yields and a firm dollar weigh on precious metals,”... the firm noted.

The rupee was trading near 95.01 against the dollar, down marginally by 0.10 per cent, testing the 94.90–95.00 support zone. ...”Elevated crude oil prices and a firm dollar have added to pressure on the domestic currency ahead of the Fed’s policy decision. Likely RBI intervention helped limit further weakness despite continued foreign equity outflows,”... Enrich Money said.

Options data on the Nifty pointed to near-term caution. Meaningful call writing was seen across the 22,700 and 22,800 strikes, indicating overhead resistance, while the 22,600 put had substantial open interest, followed by the 22,500 strike. ...”On the downside, if the index slips below 22,460, the next support is placed in the zone of 22,290–22,310. In an event of a surge above 22,790, the index can experience an extension of the rally towards 22,940,”... SBI Securities said.

All focus now shifts to the Federal Reserve’s policy decision later in the day, where markets are pricing in an approximately 82 per cent probability of a rate hold at 3.75 per cent–4.00 per cent, with a rate hike in December increasingly priced in. ...”The Fed is widely expected to keep its policy rate unchanged today, with markets pricing in an approximately 82 per cent probability of a rate hike in December. Consequently, the accompanying guidance is likely to be more consequential for gold than the rate decision itself,”... Enrich Money said — a view that applies equally to equities and currencies. ...”Elevated crude oil prices continue to cloud the outlook, with WTI trading near $101 a barrel and Brent above $115. With domestic equities facing selling pressure and external risks unresolved, the market’s near-term trajectory is likely to hinge on global cues and a revival in buying interest,”... Ponmudi R said.