Indian equity markets ended a volatile week on a flat note on Thursday, March 7th, 2024, after scaling fresh all-time highs earlier in the week. The cautiousness among traders ahead of the extended weekend for Indian markets due to Holi celebrations dampened investor sentiment and led to profit booking in some sectors.

Market Indices Settle with Modest Gains

The benchmark BSE Sensex index added a mere 33.40 points, or 0.05%, to close at 74,119.39. Similarly, the broader NSE Nifty 50 index edged up by 19.50 points, or 0.09%, to end the session at 22,493.55.

Broader Markets Outperform

Despite the flat performance of headline indices, broader markets outperformed. The BSE Midcap index and the BSE Smallcap index rose by one-third of a percent and 0.70%, respectively, indicating buying interest in smaller companies. Additionally, the fear gauge, India VIX, shed around 5%, reflecting a slight decrease in market volatility.

Selective Buying Drives Gains in Certain Sectors

While some sectors witnessed selling pressure, buying activity in others helped the market stay afloat. The Nifty Media index and the Nifty Metal index gained over 2.5% and 1.4%, respectively. The Nifty FMCG index also edged up by around 1%.

Banking, Oil & Gas, and Auto Stocks Drag the Market Down

On the flip side, selling pressure in select index heavyweights like banking, oil & gas, and auto stocks capped the overall market gains. The Nifty Private Bank index and the Nifty Auto index closed in the red.

Top Gainers and Losers

Among the Nifty 50 pack, Tata Consumer Products and Tata Steel emerged as the top gainers, rising over 3.5% each. Bajaj Auto, UPL, JSW Steel, and Tata Motors also witnessed significant gains of more than 2%.

Conversely, Mahindra & Mahindra (M&M) bore the brunt of the selling pressure, shedding 4% for the day. Bharat Petroleum and Reliance Industries also ended lower by 2.4% and 1.6%, respectively.

Market Optimism Buoyed by Economic Growth and FII Inflows

The Indian stock markets received a boost earlier in the week after faster-than-expected economic growth projections for the current fiscal year emerged. This positive news, coupled with continued foreign institutional investor (FII) inflows, bolstered investor sentiment, particularly in metal and capital goods stocks.

Global Cues and Upcoming Data to Drive Future Market Direction

Looking ahead, market participants will be closely monitoring global cues, particularly the release of non-farm payroll data in the United States on Friday. This data is expected to provide insights into the US labor market and potentially influence the Federal Reserve's monetary policy decisions, which could further impact global markets, including India.

Indian stock markets ended a volatile week on a flat note, reflecting cautious investor sentiment ahead of the extended weekend. While broader markets outperformed headline indices, selling pressure in certain sectors like banking and auto limited the upside potential. The upcoming economic data from the US and potential policy decisions by the Federal Reserve will likely be key factors influencing the market's direction in the near future.