Dalal Street Sees Big Names Slip, Midcaps and Smallcaps Take the Spotlight

Image Source: Business Standard

India's benchmark equity indices started the day in the red on Friday, May 16, 2025, after profit taking in heavyweight financial and information technology stocks sapped market sentiment. Despite the weakness in large caps, broader market indices like midcaps and smallcaps remained bright, indicative of underlying investor confidence in selected sectors.

Market Overview

The BSE Sensex dropped more than 250 points, down to 82,276 at 10:00 AM, 0.31% lower.
The NSE Nifty 50 slipped below the 25,000 level, down 60.75 points or 0.24%.
The weakness in the market came after a firm rebounding rally in the last session on the back of optimism regarding India-US trade talks and global impulses.

Key Drivers of Today's Market Movement

Financial and IT Stocks Lead the Decline
Heavyweight stocks like Bharti Airtel, IndusInd Bank, State Bank of India (SBI), Infosys, M&M, Power Grid, Sun Pharma, Tech Mahindra, and HCL Tech were among the top losers, falling as much as 2.7%.
Nifty IT and Nifty Pharma indices also fell, with IT losing up to 0.74%.
Profit booking was seen following Thursday's sharp rallies, particularly in financial and technology stocks that had led the rally till now.

Broader Markets Outperform

Conversely, the Nifty MidCap and SmallCap indices rose 0.51% and 0.93% respectively, as strong interest in non-benchmark shares was indicated.
Industry groups like realty and specific manufacturing (railway, shipbuilding) recorded high momentum, with Cochin Shipyard jumping up to 8% and Hindustan Aeronautics (HAL) rising by 3%.
The BSE Realty index gained 1.4%, with Sobha, Anant Raj, and Brigade Enterprises being notable winners.

Technical and Sentiment Insights

Despite today’s dip, Nifty remains above all major exponential moving averages (EMAs), indicating that the broader uptrend is intact.
The Relative Strength Index (RSI) for Nifty is still moving northward, supporting a positive price structure, with immediate resistance seen at 25,350 and support at 25,000 and 24,800.
Foreign portfolio investors (FPIs) were net buyers in the last session, but domestic institutional investors became net sellers, pointing to some rotation of market participation.

Sectoral Highlights

IT Sector: Big IT stocks like Infosys, HCL Tech, and Tech Mahindra led the fall, pointing to sector-specific profit booking following recent outperformance.
Financials: Banking and financial services stocks like SBI and IndusInd Bank were weak, adding meaningfully to the weakness in the benchmark indices.
Realty and Infrastructure: Performed better than the market as a whole, with the BSE Realty index rising and shares such as Cochin Shipyard and HAL registering significant gains.

Market Outlook

Analysts maintain that while Wednesday's pullback is prompted by profit booking, the overall trend in Indian equities will stay buoyant as long as key support levels remain intact.

Continuing global trade updates, notably India-US tariff talks, and sector rotation will likely shape near-term market trends.

Sources: Business Standard, Moneycontrol, CNBC TV18, Times of India, NDTV Profit, The Hindu Business Line, Economic Times