Indian Equities Trading Sideways; Metal & Auto Sector Steal the Spotlight

Indian equities remained listless throughout Tuesday’s session, with the benchmark BSE Sensex declining marginally by 20.46 points (0.02%) to close at 84,675.08. The National Stock Exchange’s Nifty50 mirrored this tepid performance, slipping 3.25 points (0.01%) to settle at 25,938.85. Both indices oscillated within narrow ranges for most of the day, with traders clearly hesitant to make bold bets ahead of the New Year break.

Metal Stocks Lead the Charge

The bright spot in an otherwise flat market came from the metal sector, which demonstrated striking resilience. Tata Steel emerged as a standout performer, climbing over 2%, while Hindalco surged 2.1%. The momentum extended across the broader metal complex, with names like NMDC, Vedanta, Jindal Stainless, and Jindal Steel all registering sharp gains. Hindustan Copper was particularly impressive, jumping 9% on robust trading volumes. This metal rally underscores growing confidence in commodity prices and industrial demand.

Automobile Sector Keeps Pace

The automobile segment similarly impressed, with Bajaj Auto leading the Nifty50 gainers at 2.3%. Mahindra & Mahindra advanced 2%, while Tata Motors Passenger Vehicles ended notably higher. The sector’s strength suggests optimism around vehicle demand recovery entering the new year.

Mixed Signals Elsewhere

Meanwhile, weakness emerged in defensive spaces. Technology stocks took a hit, with Infosys and HCL Technologies posting moderate losses. Consumer discretionary names like Asian Paints declined 1.4%, while Eicher Motors slipped 1.4%. Realty stocks remained under pressure throughout the session. However, PSU banks and select financial names provided support, with Axis Bank, State Bank of India, and Bharti Airtel closing notably higher.

Broader Market Breadth Disappoints

The overall market breadth painted a cautious picture. On the BSE, 2,259 stocks closed in the red, while only 1,919 advanced. This disparity suggests that gains were concentrated in a select few names rather than broad-based. Gujarat Kidney and Super Specialty, which debuted at Rs 120.75 (a 6% premium to the issue price), couldn’t sustain momentum and dropped nearly 10% by close.

Economic Data Points to Momentum Ahead

On the macro front, industrial production accelerated to 6.7% year-on-year growth in November, marking the fastest pace since October 2023 and a significant jump from the prior month’s 0.5% reading. Manufacturing output expanded by 8% annually, suggesting robust underlying economic activity. These figures hint that the economy remains on solid footing despite near-term market hesitation.

The takeaway: With metal stocks showing conviction and auto names rallying, Tuesday’s trading suggested sector-specific opportunities even as the broader market remained in a holding pattern.