Benchmark equity indices snapped a two-day gaining streak on Tuesday, ending nearly 1% lower, primarily dragged down by financial and information technology (IT) stocks.
After a gap-down opening, both the indices recorded an intra-day upmove of over 1%. But all the gains were later erased, with the Nifty closing nearly 200 points, or 0.7% down, at 24,826.20, while the Sensex lost more than 600 points or 0.8% to end at 81,551.63.
The volatility index also hit a high of over 19 during the day.
Both the Nifty and the Sensex had gained 1.5% in the past two sessions.
The Indian benchmarks fell even as most indices in Europe and Asia rose. US futures rose over 1% in early trade after President Donald Trump postponed the 50% tariff announced on the European Union to July 9.
However, the broader indices — BSE Midcap and BSE Smallcap — ended Tuesday’s session 0.2% higher.
Prashanth Tapse, senior vice-president (research), Mehta Equities, said: “Investors booked profit ahead of the monthly expiry on Thursday in spite of a positive sentiment in European markets and strong gains in US futures. While the markets may stay choppy due to global uncertainty, India still offers a lot of solace to investors because of its strong growth factors.”
Vikram Kasat, head – advisory, PL Capital, said: “With global cues cautious and profit booking taking centre stage, markets struggled for traction as investors stayed on the sidelines.”
Provisional data on the NSE showed that foreign institutional investors net bought shares worth Rs 348.85 crore, while domestic institutional investors were net buyers of Rs 10,104.66 crore.
Kush Gupta, director at SKG Investment & Advisory, said that trade tensions between the US and the EU have not eased with the US still insisting on a 50% tariff hike and the EU suggesting that they may take a negative action on US tech companies in retaliation. US bond yields increased to 4.63%, dampening investor sentiments across the globe.
Gupta is of the view that the delay in signing of the India-US trade agreement is also creating uneasiness among institutional investors. “In the coming week, we expect global tensions to continue to rise and this may lead to foreign outflows,” he said, adding that investors should look out for the last set of earnings numbers before taking a plunge in the markets.
Among the Nifty stocks, Jio Financial Services gained the most (around 4%) as its joint venture with US-based BlackRock got the Sebi’s nod to start mutual fund business in the country.
UltraTech Cement and ITC were the biggest losers in the Sensex pack.