On Friday, July 5, the Indian stock market faced a mixed session as HDFC Bank shares experienced heavy losses, pulling down the Sensex and Nifty 50 indices, even as select heavyweights like Reliance Industries, SBI, and Larsen & Toubro provided some support amid largely positive global cues.

Global markets were buoyed by positive sentiment, with major European markets rising ahead of the US non-farm payrolls report. Optimism about potential Federal Reserve rate cuts also kept global markets on an upward trajectory.

HDFC Bank shares ended with a significant loss of 4.50%, primarily affecting the key indices following the company's June-quarter business updates that revealed a sequential fall in advances and deposits. This drop was further compounded by the announcement that the bank's weight on the MSCI India Index is set to double, as its foreign shareholding dropped below 55% at the end of June. Experts indicate that the upcoming Union Budget and the bank's June quarter earnings will be crucial in determining the stock's future direction.

Despite the mixed performance of the benchmark indices, the midcap and smallcap segments continued their record-setting momentum, exacerbating concerns over their potentially unsustainable valuations. The Sensex slipped 53 points or 0.07% to settle at 79,996.60, while the Nifty 50 ended 22 points or 0.09% higher at 24,323.85.

The BSE Midcap index hit a new all-time high of 47,484.71 during the session, closing 0.75% higher at 47,437.85. Similarly, the BSE Smallcap index reached a fresh record high of 54,258.65 before ending 0.70% higher at 54,153.96. The overall market capitalization of firms listed on the BSE rose to nearly ₹450 lakh crore from ₹447 lakh crore in the previous session, adding about ₹3 lakh crore in a single day.

For the week ended July 5, the Nifty 50 extended its gains into the fifth consecutive week, rising 1.3%. The Sensex also increased by 1.2%, while the BSE Midcap and Smallcap indices jumped 3% and 4%, respectively.

Among the top Nifty 50 gainers were ONGC (up 4.06%), Reliance Industries (up 2.63%), and SBI (up 2.42%). Conversely, the top Nifty 50 losers included HDFC Bank (down 4.50%), Titan Company (down 1.90%), and LTIMindtree (down 0.85%).

Sector-wise, the Nifty Bank index fell 0.83%, and the Nifty Private Bank index dropped 0.97%, largely due to losses in HDFC Bank shares. On the other hand, the Nifty PSU Bank index gained 1.25%. Other sectors showing healthy gains included Nifty Oil & Gas (up 1.89%), Pharma (up 1.29%), Healthcare (up 1.27%), and FMCG (up 1.08%).

In conclusion, the Indian stock market witnessed a complex trading session with HDFC Bank shares significantly impacting the benchmarks, while positive global cues and robust performance in midcap and smallcap segments helped maintain overall market momentum. As investors look ahead to key economic indicators and corporate earnings, the market's direction will be closely monitored.

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