The Indian stock market benchmarks ended in the negative territory on Wednesday, July 10, as investors booked profits in select heavyweights, including Mahindra and Mahindra (M&M), TCS, and HDFC Bank. This profit booking led to a significant drop in the indices after they initially touched record highs.

The Sensex opened at its fresh record high of 80,481.36 but failed to hold altitude and declined over a per cent to touch an intraday low level of 79,435.76. The index finally closed 427 points, or 0.53 per cent, down at 79,924.77. Similarly, the Nifty 50 also hit its all-time high of 24,461.05 in early deals and fell over a per cent to the level of 24,141.80. The benchmark index ended 109 points, or 0.45 per cent, lower at 24,324.45.

Shares of Mahindra and Mahindra, TCS, HDFC Bank, Reliance Industries, and ICICI Bank ended as the top drags on the Nifty 50 index. This indicates that the profit booking was particularly focused on these heavyweight stocks, which have a significant influence on the overall market movement.

The domestic market benchmarks have found it difficult to hold gains at higher levels amid the lack of fresh triggers. India Inc.'s June-quarter earnings numbers and the Union Budget will be the key factors shaping the market's trajectory from hereon. Investors are eagerly awaiting these developments to get a clearer picture of the economic outlook and corporate performance.

Among the global peers, major European markets, including the UK's FTSE, France's CAC, and Germany's DAX, and US stock futures were up with healthy gains when the Sensex closed. This positive sentiment was bolstered after Fed Chair Jerome Powell, in his testimony to the Senate on Tuesday, highlighted the risks of keeping interest rates high for a longer period. This raised hopes that the US central bank may be moving towards easing monetary policy starting in September. Powell will speak before the Congress on Wednesday, and his remarks are expected to provide further insights into the Fed's policy direction.

Mirroring the trends in the benchmark indices, the midcap and smallcap indices also ended in the red. The BSE Midcap index slipped 0.19 per cent, while the BSE Smallcap index dropped 0.69 per cent. The overall market capitalization of the firms listed on the BSE fell to nearly ₹450 lakh crore from nearly ₹451 lakh crore in the previous session, making investors lose nearly ₹1 lakh crore in a single session.

Top Nifty 50 Gainers Today

Out of the 23 stocks that ended in the green in the Nifty 50 index, Asian Paints (up 3.27 per cent), SBI Life Insurance Company (up 2.05 per cent), and Divi's Laboratories (up 1.63 per cent) stood at the top. These stocks managed to post gains despite the overall market decline, showcasing their resilience.

Top Nifty 50 Losers Today

Shares of Mahindra and Mahindra (down 6.69 per cent), Hindalco (down 2.11 per cent), and Tata Steel (down 2.10 per cent) closed as the top losers in the Nifty 50 index. The significant drop in M&M's shares was a major contributor to the index's decline.

Sectoral Indices Today

The Nifty Auto index fell 2.02 per cent, ending as the top loser among sectoral indices. Other notable losers included Nifty Media (down 1.76 per cent), Metal (down 1.61 per cent), PSU Bank (down 1.40 per cent), and IT (down 1.03 per cent). The broad-based decline across various sectors indicates a widespread sentiment of caution among investors.

Nifty Bank fell 0.72 per cent and the Private Bank index lost 0.56 per cent. These declines reflect the cautious stance of investors towards the banking sector, which is often sensitive to changes in economic conditions and monetary policy expectations.

In conclusion, the Indian stock market's decline on Wednesday was driven by profit booking in key heavyweight stocks. Despite the initial record highs, the lack of fresh triggers and anticipation of upcoming economic events led to a pullback. Investors are now looking ahead to the June-quarter earnings reports and the Union Budget for further direction. Global market trends and Fed Chair Jerome Powell's testimony are also crucial factors that will influence investor sentiment and market movements in the coming days.

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