Indian equity markets witnessed a pullback on August 5 as both benchmark indices closed in the red. The Nifty 50 slipped more than 70 points to settle at 24,650, while the Sensex ended the day over 300 points lower at 80,700. Selling pressure at higher levels and lack of fresh triggers led to a broad-based decline across key sectors.

The Bank Nifty also faced a sharp correction, ending 260 points lower at 55,360. The bearish undertone was visible across midcap and smallcap segments too. The BSE Midcap index shed 62 points to close at 45,596.16, while the BSE Smallcap index dropped 140 points, finishing at 52,831.41.

Throughout the trading session, the market showed signs of weakness. According to Rupak De, Senior Technical Analyst at LKP Securities, the Nifty remained below its 50-day exponential moving average and continued trading with a negative bias. On the daily chart, the index appeared comfortable within a range of 24,400 to 24,850. Analysts believe that only a decisive breakout beyond this band will signal a clear directional move.

Shrikant Chouhan, Head of Equity Research at Kotak Securities, noted that the market is currently experiencing non-directional activity. With traders hesitating to take aggressive positions, both bulls and bears are waiting for a breakout to dictate the next trend. He also pointed out that while select defence stocks saw some intraday interest, the capital market index recorded the most significant drop among sectoral indices, shedding more than one percent.

The overall market breadth reflected the bearish sentiment. Out of 3,065 actively traded stocks, 1,785 declined, while only 1,200 advanced. Another 80 stocks closed unchanged. Interestingly, 50 stocks still managed to hit new 52-week highs, while 55 stocks registered fresh 52-week lows, suggesting a mixed sentiment at the broader level.

In terms of individual stock performance, Titan emerged as the top gainer on the Nifty 50, climbing nearly 2 percent. It was followed by IndusInd Bank, SBI Life Insurance, Maruti Suzuki, and Coal India, all of which posted modest gains during the session.

On the losing end, Adani Ports and Special Economic Zone witnessed the sharpest decline, falling close to 2 percent. Other significant laggards included Reliance Industries, Infosys, Adani Enterprises, and Cipla, among others. These heavyweight stocks contributed to the overall drag on the benchmark indices.

Experts suggest that in the absence of strong domestic or global cues, markets may continue to consolidate within a tight range. With earnings season coming to a close and macroeconomic data awaited, investors are likely to remain cautious in the near term.

Despite the short-term weakness, market watchers remain optimistic about long-term prospects, especially with sectors like defence, real estate, and consumption showing strength in select pockets.

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