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The Indian stock market experienced a mixed trading session on June 10, 2025, with the Nifty 50 ending marginally higher while the Sensex saw minor declines, signaling a pause after a robust four-day rally. This consolidation was primarily attributed to profit booking in key sectors such as realty, banking, and financial services, which had previously benefited from the Reserve Bank of India's (RBI) decision to reduce the benchmark lending rate and the Cash Reserve Ratio (CRR). Despite this, the overall market sentiment remained cautiously optimistic, supported by positive global cues and sustained investor interest in select sectors. The India VIX, a measure of market volatility, eased, reflecting a decrease in investor apprehension. The performance of broader market indices, including the Nifty Midcap 100 and Nifty Smallcap 100, mirrored the caution observed in the frontline indices, indicating a broad-based hesitancy among investors to aggressively increase their positions. This cautious approach is typical after a significant market upswing, as investors often take profits and reassess their strategies in light of prevailing market conditions and economic indicators.
The real estate sector faced the brunt of profit booking after a substantial rally triggered by the RBI's policy easing, where the benchmark lending rate was cut by 50 basis points and the CRR by 100 basis points. This monetary policy adjustment had initially spurred significant buying interest in the realty sector, anticipating lower borrowing costs and increased demand for real estate. However, the subsequent profit-taking suggests that investors believed the initial rally had priced in much of the positive impact of the RBI's measures. Banking and financial stocks also experienced similar profit booking, indicating that investors were rebalancing their portfolios after the initial surge following the RBI's announcement. In contrast, the information technology (IT) sector emerged as a strong performer, driven by positive news from the United States, including robust jobs data and optimism surrounding a potential trade agreement between the U.S. and China. These factors fueled investor confidence in the IT sector, leading to increased buying activity and pushing IT stocks higher. This sectoral rotation underscores the dynamic nature of the stock market, where investor sentiment can shift rapidly based on evolving economic conditions and geopolitical developments.
Data released by the Association of Mutual Funds of India (AMFI) revealed a decrease in net inflows into equity mutual funds in May, falling 21.66 percent to a one-year low of Rs 19,013.12 crore. This decline could be attributed to various factors, including increased market volatility, profit booking by investors, or a shift in investor preferences towards other asset classes. Despite the drop in equity inflows, the overall net assets under management (AUM) of the mutual fund industry continued to rise, reaching a record high of Rs 72.20 lakh crore, driven by mark-to-market (MTM) gains in equities. This indicates that while new investments in equity funds decreased, the existing equity holdings within mutual fund portfolios appreciated in value, contributing to the overall growth of AUM. Furthermore, the mutual fund industry witnessed net inflows of Rs 29,108.33 crore in May, suggesting that investors were still allocating funds to mutual funds, albeit not as heavily in equity as in previous months.
The Systematic Investment Plan (SIP) route continued to attract significant investor interest, with monthly inflows rising by 0.21 percent to a new high of Rs 26,688 crore in May. This demonstrates the growing popularity of SIPs as a disciplined and convenient investment approach, particularly among retail investors. The consistent increase in SIP inflows indicates that investors are increasingly adopting a long-term investment perspective, spreading their investments over time to mitigate market volatility. The number of contributing SIP accounts also increased to 8.56 crore in May, further highlighting the growing adoption of SIPs among a wider range of investors. The stability and growth of SIP inflows provide a strong foundation for the mutual fund industry, helping to cushion the impact of fluctuations in lump-sum investments and contributing to the overall stability of the market. Dhuhpesh Dhameja, Derivatives Research Analyst at SAMCO Securities, noted that the Nifty's ability to hold above the 25,000 mark suggests continued buying interest at lower levels, while a break above 25,150 could trigger a further uptrend towards 25,300. Conversely, a drop below 24,800 would signal potential weakness in the market.
In conclusion, the Indian stock market on June 10, 2025, presented a picture of cautious consolidation following a recent rally. Profit booking in key sectors, coupled with mixed global cues, led to a relatively flat trading session. While equity mutual fund inflows declined, the overall AUM of the mutual fund industry continued to grow, supported by MTM gains and sustained SIP inflows. The market's ability to hold above key support levels suggests continued underlying strength, but investors remain vigilant in light of evolving economic conditions and global developments. The sectoral rotation observed during the trading session underscores the importance of diversification and active portfolio management in navigating the dynamic stock market landscape. The analyst's comments provide valuable insights into potential future market movements, highlighting key levels to watch for both bullish and bearish scenarios. Moving forward, investors will likely continue to monitor economic indicators, corporate earnings, and global events to gauge the direction of the market and make informed investment decisions. The strength of the IT sector stands in contrast to the pressure on banking, financial, and realty sectors. Investor appetite for IT is a global trend and any further cooling of international tensions, specifically the US-China relationship, will only continue to bolster IT. The continued growth in SIP investments shows the retail investor's resilience and appetite for growth in the market as well, and if the Indian markets provide attractive valuations, that will certainly continue.
Market breadth showed approximately 2160 shares advancing, 1722 shares declining, and 136 shares remaining unchanged. The mixed market sentiment was further reflected in the performance of smallcap and midcap indices, which mirrored the muted movement of the frontline indices. These indicators collectively suggest a widespread cautious approach across the market spectrum. The cooling off of the India VIX index by 4.5 percent to the 14 mark also signifies a reduction in the perceived level of risk among investors, contributing to a more stable market environment. However, investors should remain aware that market volatility can be influenced by a variety of factors, including unexpected economic announcements, geopolitical events, and changes in investor sentiment. Therefore, it is essential to adopt a risk-aware approach and carefully consider their investment objectives before making any investment decisions. The analyst's commentary regarding key Nifty levels underscores the importance of technical analysis in identifying potential support and resistance levels, which can provide valuable insights into market trends and potential trading opportunities. Investors often use technical indicators and chart patterns to assess market momentum and identify potential entry and exit points for their investments. Ultimately, success in the stock market requires a combination of fundamental analysis, technical analysis, and a disciplined investment approach.
Source: Nifty ends at 25,100 as banks drag, Sensex whipsaws after 4-day rally; India VIX cools 4%