The broader markets extended their decline during Tuesday's trading session, with mid and small-cap indices significantly underperforming the benchmark Sensex and Nifty. The selling pressure was particularly evident in the broader market segments, reflecting weak investor sentiment across various sectors.

Market Performance Overview

The benchmark indices traded lower throughout the session, with both Sensex and Nifty posting notable declines. The broader market indices witnessed even steeper falls, indicating profit-booking across mid and small-cap stocks.

Technical Breakdown in Midcap Segment

The Nifty Midcap 100 slipped below its crucial 100-day moving average during intraday trade, reaching 58,510.60. This technical breakdown suggests weakening momentum in the mid-cap space and could indicate further selling pressure in the near term. The breach of this key technical level is significant as the 100-DMA often serves as an important support and resistance level for traders and investors.

Oberoi Realty Leads Decline

Oberoi Realty emerged as the biggest laggard in the midcap segment, with real estate stocks witnessing sharp declines. The selling pressure in real estate companies was primarily attributed to weak investor sentiment following Oberoi Realty's Q3 earnings announcement.

Oberoi Realty Q3 Financial Performance

The company reported mixed quarterly results that disappointed market participants:

The company's consolidated net profit showed marginal year-on-year growth of 0.69 percent but declined significantly by 18 percent on a quarter-on-quarter basis. While net sales grew 5.78 percent year-on-year, the sequential decline in profitability raised concerns among investors about the company's operational efficiency and market conditions.

Sector-Wide Impact

The weakness in Oberoi Realty had a cascading effect on other real estate stocks, with the entire sector experiencing one of its worst trading sessions in six months. The profit-booking activity extended beyond individual stock performance, reflecting broader concerns about the real estate sector's near-term prospects and valuation levels after recent gains.

The Nifty Bank index extended its decline for the second consecutive session, breaking a four-day gaining streak as PSU bank stocks faced significant selling pressure. The index dropped 0.42% to 59,642.70 as of 12:45 pm, while the Nifty PSU Bank index declined more sharply by 1.15% to 8,884.

Major Losers Lead Banking Sector Decline

Yes Bank and IndusInd Bank emerged as the top losers on the Nifty Bank index, with both stocks falling approximately 4% each. The performance breakdown shows:

IDFC First Bank shares declined more than 1%, while Union Bank of India and Axis Bank traded in the red with marginal losses, contributing to the overall weakness in the banking sector.

Private Bank Giants Buck the Trend

Despite the broader banking sector decline, several heavyweight private banks demonstrated resilience by posting marginal gains:

• HDFC Bank
• ICICI Bank
• Kotak Mahindra Bank
• State Bank of India

These major private sector lenders helped limit the overall decline in the Bank Nifty index, showcasing the divergent performance within the banking space.

Technical Analysis and Market Outlook

Emkay Global Financial Services noted that Bank Nifty continues to show relative outperformance, maintaining a bullish structure despite encountering mild resistance near the 60,200 level. The brokerage suggests that a sustained move above this resistance could fuel further upside, while identifying the 59,200-58,900 zone as a strong support cushion.

Axis Securities highlighted that Bank Nifty remains centered around the 60,000 level, which is acting as a key pivot for the current expiry. The brokerage's analysis indicates:

Choice Broking observed that Bank Nifty exhibited relative resilience near the 59,800-60,000 range, though hesitation around 60,000 underscores indecision in the banking complex. According to their analysis, a break above 60,000 could revive short-term bullish sentiment, while a breach of 59,500-59,600 might signal extended consolidation.

Market Context

The current decline represents a pause in the banking sector's recent momentum, with the index having enjoyed a four-day gaining streak before the current two-day decline. The divergent performance between PSU and private banks highlights the selective nature of current market movements, with investors showing preference for established private sector players over their public sector counterparts.