Quiet start for Sensex, Nifty after three-day rally but 25,500 holds, mid and smallcaps higher

Benchmark indices Nifty and Sensex were off to a muted start on June 27, following a three-day rally lifted by easing geopolitical tensions, steady crude prices, and optimism around a potential India-US trade deal. PSU bank and metal stocks gained while the broader markets outperformed the benchmarks.

At about 9:35 am, the Sensex was up 54.50 points or 0.07 percent at 83,810.37, and the Nifty was up 20.70 points or 0.08 percent at 25,569.70. About 2053 shares advanced, 802 shares declined, and 154 shares remained unchanged.

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Global cues were positive as the US market rose with the S&P 500 gaining 0.8 percent, just shy of its record high. The Nasdaq Composite gained nearly 1 percent, while the Dow advanced 0.9 percent, with both indices inching closer to new all-time highs.

The ongoing market rally seems unfazed by the upcoming July 9 tariff deadline set by President Trump, with reports suggesting a likely extension, providing a positive boost to sentiment, experts say.

"Meanwhile, a key development in the currency market is the continued weakness in the US dollar, with the dollar index slipping to around 97. This has likely contributed to the strong FII inflows of Rs 12,594 crore on Tuesday—a significant figure even after accounting for bulk deals," V K Vijayakumar, Chief Strategist at Geojit Investments Limited.

Sectoral trends on the NSE were mixed in early trade. Nifty PSU Bank led the gainers with a rise of 1.31 percent, followed by Nifty Metal up 1.11 percent and Nifty Oil & Gas up 0.70 percent. Other notable gainers included Nifty IT and Nifty Auto, rising 0.41 percent and 0.36 percent, respectively. The Nifty Midcap 100 and Smallcap 100 indices also edged up by around 0.4 percent each. Meanwhile, volatility ticked slightly higher, with India VIX up 0.32 percent at 12.63.

Also read: Trump hints at ‘very big’ trade deal with India after China pact

From a technical perspective, Nifty successfully closed above the immediate hurdle of 25,500, underscoring the strength of current momentum. As the index sustains above this breakout zone, the next leg higher seems imminent. A move beyond today’s high would likely re-energise bullish sentiment and potentially drive the index toward the next resistance at 25,750. On the flip side, a breach below the crucial 25,000 level could spark a corrective pullback, though the current chart structure favours a ‘buy-on-dips’ strategy as long as support levels remain intact. As the index has closed strongly on monthly expiry, strong rollovers toward the July series can be seen.

As for individual stocks, State Bank of India gained over a percent after CLSA maintained an outperform rating on the lender, citing the bank's strong positioning in the coming quarters. SBI has continued to gain market share for the fourth consecutive year, not only from PSU peers but also from some private sector banks, CLSA added.

Read more: Oil set for weekly loss on fading Mideast supply risks

Varun Beverages gained, snapping its two-day losing streak, after HSBC retained its buy rating, suggesting that the recent correction is unwarranted. The brokerage noted that the stock is currently trading at a 20 percent discount to the average P/E multiple of the broader consumer packaged goods (CPG) sector.

Nykaa shares slipped 1 percent even after it expects the fashion segment to achieve breakeven by FY26, with EBITDA margins rising to mid-single digits by FY28, and eventually reaching 10 percent in the steady state. Nykaa is targeting a 3–4x expansion in overall scale over the next five years. While CLSA has an outperform rating, Nomura is neutral on the counter.

L&T, Tata Steel, SBI, Apollo Hospital, and NTPC were the top gainers on the Nifty. Laggards on the index included Cipla, HDFC Bank, SBI Life Insurance, Kotak Mahindra Bank, and Bajaj Finserv.

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