The bulls took a breather on Tuesday, a day after recording their best session in four years with a 4% rally, as investors resorted to profit booking. Benchmark indices declined by up to 1.55%, with TECK, IT, utilities, FMCG, and power sectors witnessing heavy selling pressure.
The Sensex fell 1,281.68 points, or 1.55%, to close at 81,148.22, while the Nifty dropped 346.35 points, or 1.39%, to end the day at 24,578.35. Outperforming the benchmarks, the broader BSE Midcap and BSE Smallcap indices extended their gains for a second consecutive session, rising 0.17% and 0.99%, respectively. Market experts said that while the overall sentiment remains bullish, the huge rise on Monday gave opportunities to investors to take some money off the table. Moreover, with the fear of geopolitical tensions coming down, investors will be more focussed on the earnings season.
Foreign portfolio investors were net sellers of Indian equities worth Rs 476.86 crore, while domestic institutional investors purchased shares worth Rs 4,273.80 crore, according to provisional data by the BSE.
“Markets took a breather after a phenomenal start to the week, ending the session with a loss of over one per cent. The dip reflects caution among participants despite easing geopolitical tensions and stable global cues. However, we expect the overall tone to remain positive, given the noticeable support in the 24,400–24,600 zone,” said Ajit Mishra, senior vice president, research, Religare Broking.
Vikram Kasat, head, advisory of PL Capital, said that profit booking weighed on frontline indices. “The correction came despite upbeat investor sentiment, buoyed by easing global trade tensions and continued foreign inflows, with FPIs pumping $1.7 billion into equities so far this month,” added Kasat.
Interestingly, despite the correction, the overall market breadth remained positive, with 2,514 gainers versus 1,455 losers on the BSE. On the sectoral front, TECK, IT, utilities, FMCG, and power were the top laggards, falling up to 2.39%. Notably, IT had been Monday’s top-performing sector, posting a 6.75% gain.
Infosys, Power Grid, Eternal, HCL Tech, and TCS were the top Sensex losers, declining up to 3.54%. Investor wealth dropped by Rs 1.45 lakh crore, bringing the total BSE market capitalisation to Rs 431.11 lakh crore.