Benchmark indices Nifty and Sensex pared all losses from the morning and were trading flat after auto and metal stocks helped regain momentum. However,  IT and energy stocks dented the sentiment in the market. Investors currently grapple with multiple concerns, including underwhelming Q2 earnings, persistent foreign outflows, and lofty valuations.

At 1 pm, the Sensex was down 169.21 points or 0.22 percent at 77,411.10, and the Nifty was down 44.20 points or 0.19 percent at 23,488.50. About 1537 shares advanced, 1935 shares declined, and 110 shares unchanged.

During the afternoon, the broader market, represented by the midcap and smallcap indices, showcased mixed trends after the midcap index rose marginally. Meanwhile, the smallcap index traded lower. Despite the recent pressure, both indices have gained 17 percent since the start of the year, significantly outpacing the Nifty's 8 percent rise during the same period.

India VIX, the barometer to assess market anxiety, also flared up 4 percent to inch closer towards the 16 levels.

Sectoral Trend

Nifty IT was the biggest laggard, falling over 2 percent after US Federal Reserve Chair Jerome Powell said that there was no need to rush to lower interest rates due to ongoing economic growth, a robust job market and inflation that remains above its 2 percent target. Steep cuts were also seen in Nifty Energy led by stocks like NTPC, Adani Enterprises and Coal India.

On the other hand, Nifty Metal was the brightest spark and rose 3 percent after China decided to reduce or cancel export tax rebates for select products made of aluminium and copper. Auto stocks also performed well largely helped by Hero MotoCorp on the back of robust guidance and brokerages dishing out bullish calls on the stock.

Fundamental View

"Even though Nifty has corrected 10.4 percent from the peak there are no signs of a sustained recovery in the market. Relentless FII selling, earnings downgrades for the majority of stocks for FY25, and the consequences of the Trump trade are weighing on the market. Sentiments have turned negative and, therefore, investors should exercise caution at this stage and wait for clarity on the direction of the market," V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.

He added that the rise in the dollar index at 106.6 and the 10-year US bond yield at 4.44 percent leaves little room for a quick reversal of FII flows. Investors can focus on areas of strength like digital companies and quality banking stocks.

Technical View

Thursday's market showed a potential for a small recovery, with some signs that the price could bounce back after dropping too low. However, a strong recovery isn't expected right now due to ongoing challenges. If the price rises above 23,733-23,788, it could go up to 24,111. Any quick recoveries may face resistance. On the downside, the market is unlikely to fall below 22,800, says Anand James of Geojit Financial Services.

Key Nifty Gainers

Hero MotoCorp, Hindalco, and Tata Steel

Key Nifty Losers

Wipro, Infosys, and TCS

Key Sensex Gainers

Tata Steel, M&M, and Maruti Suzuki

Stock Moves

FirstCry: Shares rallied almost 8 percent after the company narrowed its losses in Q2 to Rs 63 crore from Rs 119 crore. It posted a revenue of Rs 1,904.9 crore in Q2FY25, a 26.4 percent increase from Rs 1,506.88 crore generated in the same quarter last year.

Honasa Consumer: Shares hit its 20 percent lower circuit in the morning session on November 18 after the parent company of D2C brand Mamaearth shared a weak earnings report for the quarter that ended September, reporting its first quarterly loss in five quarters.

City Gas Distribution Co's: Shares crashed 20 percent after the government cut the Administered Price Mechanism (APM) allocation to CGD players by 20 percent for the second month in a row. IGL and MGL have reported 20 percent and 18 percent additional cuts, respectively, over the -20 percent cut which was announced earlier on October 16, while Adani Total Gas has indicated a 13 percent cut.