Bank stock gains offset auto losses as Sensex, Nifty end flat on monthly expiry

Indian benchmark indices Sensex and Nifty ended flat on Thursday, as gains in financial and banking stocks balanced out losses in the automobile sector. The Nifty traded within a narrow 100-point range as caution prevailed among investors on the monthly expiry of Nifty 50's derivatives contracts. Broader sentiment remained subdued and directionless amid mixed global cues.

The benchmark BSE Sensex added 10.31 points or 0.01% to close at 74,612.43, while the broader Nifty 50 index closed at 22,545.05, lower by 2.50 points or 0.01%.

The market capitalization of all listed companies on the BSE decreased by Rs 4.11 lakh crore to Rs 393.10 lakh crore.

Sector Watch

Financial stocks rose 0.5% after the Reserve Bank of India eased lending norms for small borrowers and non-bank lenders. The move is expected to improve credit flow and lower interest rates. Bandhan Bank advanced 1.2%, while Bajaj Finance surged 2.4%.

Index heavyweight HDFC Bank advanced nearly 1%.

In contrast, auto stocks dropped 1.6%, snapping a two-day winning streak, as Tata Motors, Mahindra & Mahindra, and Bajaj Auto declined over 2% each.

UltraTech Cement slumped 5% to its lowest level since early June after announcing an unexpected foray into the wires and cables business. Analysts viewed the move as a potential capital allocation risk, triggering a broader selloff in the sector.

Concerns over rising competition weighed on other wires and cables companies, with Havells India and PolyCab India tumbling 6.3% and 18.8%, respectively. KEI Industries and R R Kabel saw steeper declines, plunging 21% and 20%, respectively.

India’s benchmark indices have fallen about 5% year-to-date, with the Nifty down nearly 14% from its peak. The selloff has been sharper in smaller stocks, with the Nifty Midcap and Nifty Smallcap indices losing 13% and 18%, respectively, this year.

In Thursday’s session, the Nifty Midcap 100 and Nifty Smallcap 100 indices fell 1.2% and 1.8%, respectively. The broader market remained subdued, as caution prevailed among investors on the monthly expiry of Nifty50’s derivatives contracts, keeping trade rangebound.

Expert Take

The domestic equity main indices remained largely unchanged due to optimism in the financial sector supported by the RBI’s decision to ease lending norms for microfinance institutions and NBFCs, said Vinod Nair, Head of Research at Geojit Financial Services.

“Global market swayed negatively, and domestic broader market sentiment remained weak due to fresh uncertainty surrounding US tariff policies. Amid ongoing trade tensions, investors are also keeping a close watch on US and domestic GDP data for further indications of economic strength,” said Nair.

The Nifty remained range bound during the day before closing flat and sellers continued to dominate the market at higher levels, said Rupak De, Senior Technical Analyst at LKP Securities, adding that on the lower end, 22,500 continues to act as support, similar to how 22,800 did a few days ago.

“We expect the Nifty to decline towards 22,200 and lower if it falls below 22,500. On the higher end, 22,650 might act as immediate resistance. In the short term, the index is likely to remain a "sell on rise" as long as it stays below the 22,750-22,800 range," De said.

Global Markets

Global stocks remained largely steady on Thursday after Nvidia’s earnings delivered no major surprises, while European markets edged lower following former U.S. President Donald Trump's threat to impose 25% tariffs on EU imports.

U.S. stock futures pointed to a positive open, with Nasdaq futures rising 0.6% and S&P 500 futures up 0.5%. Meanwhile, U.S. Treasury yields climbed as investors weighed the potential economic impact of tariffs. The 10-year yield rose to 4.2924%, up from Wednesday’s low of 4.245%.

Elsewhere in Asia, Japan’s Nikkei 225 gained 0.3% to close at 38,256.17. Hong Kong’s Hang Seng fell 0.3% to 23,718.29, with tech stocks—strong performers earlier in the week—leading the declines. Meanwhile, China’s Shanghai Composite rebounded from early losses to close 0.2% higher at 3,388.06.

South Korea’s Kospi shed 0.7% to 2,621.75, while Taiwan’s benchmark index tumbled 1.5%. Thailand’s SET index also struggled, dropping 1.3%.

Currency Watch

The Indian rupee closed nearly unchanged on Thursday, as weakness in Asian currencies amid U.S. tariff-related uncertainties was offset by the central bank's swift and aggressive intervention. The rupee settled at 87.20 against 87.21 in the previous session.

The U.S. dollar index edged up 0.17% to 106.64, extending its rebound from a 2.5-month low earlier this week.

Crude Impact

Oil prices inched higher on Thursday, rebounding from losses in the previous two sessions, as supply concerns resurfaced following former U.S. President Donald Trump’s decision to revoke Chevron’s license to operate in Venezuela.

By 07:31 GMT, Brent crude futures rose 2 cents to $72.55 per barrel, while U.S. West Texas Intermediate (WTI) crude futures gained 6 cents to $68.68 per barrel.

FII/DII Tracker

Foreign institutional investors (FIIs) extended their selling spree for the fifth consecutive session, offloading equities worth Rs 3,529 crore on February 25. In contrast, domestic institutional investors (DIIs) provided some support, purchasing equities worth Rs 3,030 crore on the same day.