Indian domestic indices ended deep in the red today,, with the Sensex and Nifty registering sharp losses as profit-booking, weak global cues, and FII outflows weighed heavily on investor sentiment. This marks the third consecutive session of decline for the benchmarks.
The Sensex closed the day at 81,213.97, down 845.45 points or 1.03%, while the Nifty 50 ended at 24,683.90, falling 261.55 points or 1.05%. Both indices erased early gains and fell sharply in the afternoon session, dragged by a selloff in auto and financial stocks.
The Nifty Bank index also mirrored the broader trend, trading nearly 1% lower at 54,877.35 during the session. All the sectoral indices ended in the red.
“With the lack of major positive triggers and prevailing uncertainty over U.S. fiscal stability, investors opted for profit-booking and adopted a cautious stance. Selling pressure was widespread as participants awaited more clarity on the India-U.S. trade agreement. Given the current premium valuations and delays in the trade deal, we foresee a phase of short-term consolidation, which may lead FIIs to scale back their positions in the domestic market,” said Vinod Nair, Head of Research, Geojit Investments Limited.
Lets take a look the key highlights of today’s trading session
Profit booking drags key sectors
After a sustained rally over the last few weeks, investors took the opportunity to book profits, especially in high-performing sectors like auto, banking, and pharma. This led to a broad-based correction across the board.
Key laggards in the today’s trading session included Hero MotoCorp, Bajaj Auto, Maruti Suzuki, Eicher Motors, and M&M, which dropped between 2% to 3%. Furthermore financial stocks like Shriram Finance and Edelweiss Financial also saw a sharp cuts.
The selloff was not limited to large caps alone. The broader market took a hit as well. The BSE MidCap index plunged 1.55%, while the BSE SmallCap index fell 0.94%.
“While markets had witnessed a pullback rally over the past week due to Indo-Pak ceasefire, US-China heading towards a tariff understanding and strong FII fund inflows, the mood is reversing back to caution with a negative bias. The current situation shows that markets will see bouts of optimism followed by a volatile phase as global economic uncertainty remains a key challenge for investors,” said Prashanth Tapse, Senior VP (Research), Mehta Equities.
Gainers in the falling market
A few stocks in the Nifty 50 managed to hold their ground in the falling market. Coal India, ONGC, Tata Steel, Hindalco, Dr Reddy’s, and Infosys ended the session with modest gains ranging from 0.13% to 1.4%.
Weak global sentiment adds pressure
Global cues were far from encouraging. While Chinese markets saw some optimism after an unexpected rate cut, but hopes of a breakthrough in India-US trade talks dimmed. Investors were expecting a positive outcome from Commerce Minister Piyush Goyal’s visit to the US. However, with no official deal announced, uncertainty crept in.
Rupee and FII
The Indian rupee also felt the heat, dropping 13 paise against the US dollar in early trade. This, combined with continued foreign institutional investor (FII) selling, added to the market’s nervousness.