Sensex, Nifty retreat from record highs on profit booking

Stock market news: Benchmark indices gave up early gains to close broadly unchanged on Monday as traders booked profits, with information technology and consumer stocks leading the decline.

The NSE Nifty 50 settled at 24,836.1 points and the BSE S&P Sensex closed at 81,355.84 points, both little changed from the previous session. Earlier in the day, both benchmarks had risen by 0.4 per cent to reach all-time highs.

"Market participants are getting jittery with the Nifty rising to 25,000 points as valuations are high after a strong session on Friday," said Aishvarya Dadheech, founder and chief investment officer at Fident Asset Management. Despite this, Dadheech noted that the strength in mid-cap stocks indicates that overall market sentiment remains positive.

Indian stocks have been reaching record highs over the past several weeks, supported by foreign inflows. This upward trend continued despite the government raising taxes on equity capital gains and derivatives trading last week.

On Monday, the Nifty consumer goods index and information technology index dropped by 0.3 per cent and 0.4 per cent, respectively, dragging down major sectors. Saurabh Jain, assistant vice president for research at SMC Global Securities, attributed this decline to profit booking as valuations remain high. The Nifty IT index had gained 2.3 per cent in the previous session, while the consumer goods index had risen by 1 per cent.

In contrast, India's small-cap and mid-cap indexes outperformed the blue-chip stocks by rising about 1 per cent each, with the mid-caps notching a record closing high.

Among individual stocks, construction major Larsen & Toubro surged by 2.6 per cent, making it one of the top points gainers on the Nifty 50 after securing multiple large orders. Home appliances maker Whirlpool of India advanced by 4.6 per cent following a first-quarter net profit jump of more than 90 per cent.

Overall, while the main indexes ended the day flat, the positive performance of mid-cap stocks and specific large-cap companies highlights a mixed sentiment in the market, with traders cautious about high valuations but still finding opportunities in select sectors.