NIFTY50 and SENSEX trade flat, Bank Nifty trades 250 points lower; Divi's Lab and Hindalco top gainers

Indian markets opened on a subdued note today, reflecting the wary mood after profit booking on Wall Street overnight. However, key equity benchmark indices rebounded from lower levels, albeit gains were curtailed by profit booking at higher levels particularly in banking and financial stocks. HDFC Bank, ICICI Bank, and SBI have been a significant drag on the indices. The NIFTY50 index is trading in positive territory, up by 0.08% above the 24,700 level. While the SENSEX is down marginally by 43 points at 80,757.

The Nifty Bank is trading lower by 285 points at 50,520 level. The decline in banking stocks is largely due to the RBI’s concerns over the growing disparity between credit growth and deposit growth. The RBI has advised banks to closely monitor this gap to avoid potential liquidity issues. While loan demand has surged due to economic growth, deposit growth hasn't kept pace, leading to worries about banks' future liquidity management. This cautionary stance by the RBI has likely contributed to the underperformance of banking stocks in today's session.

On the sectoral front, Nifty Media (1.08%), Nifty FMCG (0.90%), and Nifty Pharma (0.68%) were up the most among all indices. Hitting a new high, Nifty Pharma extended its rally for the fourth session. Broader markets have outperformed the frontline gauge, with Nifty Midcap 100 and Nifty Smallcap 100 rising by 0.30% and 1.04% respectively. Market breadth was strong as there were 1,593 advancing stocks compared to 710 declining ones.