After a week of impressive gains, the Indian stock market took a breather on Friday, with the Nifty and Sensex ending marginally lower. Profit-taking in banking and IT stocks, coupled with a cautious approach ahead of the Reserve Bank of India's (RBI) monetary policy announcement, contributed to the slight decline. However, the broader market remained resilient, with mid- and small-cap stocks continuing their upward trajectory.

Market performance:

At the close of trading, the Sensex was down 56.74 points, or 0.07%, at 81,709.12, while the Nifty slipped 30.60 points, or 0.12%, to settle at 24,677.80. Despite the overall decline, market breadth remained positive, with 2,289 shares advancing and 1,536 declining.

Sectoral trends:

• Banking and IT: Nifty Bank, Pharma, and IT indices were among the top laggards, with losses of up to 0.2%. Banking stocks witnessed profit-booking after a strong rally throughout the week.
• Metals and Auto: Nifty Metal and Nifty Auto indices were among the top gainers, rising by over 1% each. Vedanta, Tata Steel, JSW Steel, Tata Motors, Bajaj Auto, and Maruti Suzuki were among the key contributors to the gains in these sectors.
• PSU Banks: The Nifty PSU Bank index continued its impressive performance, gaining 0.5% and extending its rally to over 5% since the start of the week.

Mid- and Small-Cap Outperformance:

The mid- and small-cap indices outshone the benchmark indices, gaining 0.4% and 0.6%, respectively. This suggests continued optimism among investors regarding the growth prospects of smaller companies.

Key market movers:

• Vedanta: Shares of Vedanta surged over 6% after the company announced the release of encumbrances over its equity shares held by parent Vedanta Resources.
• Maruti Suzuki: The country's largest carmaker rallied over 1% after announcing a price hike of up to 4% on its vehicles starting in January 2025.
• MCX: Shares of MCX hit a record high, driven by heavy trading volumes.

 Despite Friday's slight pullback, the Indian stock market remains on a positive trajectory. The recent gains have been driven by a combination of factors, including strong corporate earnings, positive global cues, and renewed FII interest. While some profit-taking is expected after a strong rally, the underlying sentiment remains bullish. The RBI's monetary policy stance, the upcoming corporate earnings season, and global macroeconomic developments will be key factors to watch in the coming weeks. The continued outperformance of mid- and small-cap stocks suggests that investors are optimistic about the long-term growth prospects of the Indian economy.

DISCLIMER: Prameya or Prameya News7 does not endorse the views or recommendations expressed by experts/brokerages in this article. These are solely their opinions. Readers are advised to consult with a qualified financial advisor before making any investment or trading choices