Sensex Tumbles Over 600 Points from Intraday High as Nifty Slips Below 23,400

The benchmark equity indices, the BSE Sensex and NSE Nifty 50, surrendered their early morning gains around noon on Tuesday, slipping sharply from intraday highs as investors locked in profits following Monday's sharp rebound.

In early trade, the Sensex had gained 511.46 points or 0.67 percent to touch a high of 76,014.31, while the Nifty reclaimed the 23,500 level to touch an intraday peak of 23,577.55. However, the indices trimmed gains as selling pressure mounted across major sectors, causing the Sensex to tumble over 600 points from its day's high to trade around 75,397.92, while the Nifty slipped to 23,391.90.

This intraday reversal followed a robust session on Monday, when the Sensex surged 938.93 points (1.26 percent) to settle at 75,502.85 and the Nifty rallied 257.70 points (1.11 percent) to close at 23,408.80.

Key Drivers Behind the Mid-Session Reversal

Several domestic and external headwinds triggered the sudden reversal on Dalal Street:

• Profit Booking at Higher Levels: Following Monday's relief rally, profit booking emerged across key index heavyweights. IT, FMCG, and financial services witnessed noticeable selling, with the Nifty IT index leading declines, falling around 0.8 percent.
• Relentless FII Outflows: Foreign institutional investors (FIIs) remained consistent sellers, offloading equities worth ₹9,365.52 crore in the previous trading session and keeping underlying market momentum fragile.
• Surging Crude Oil Prices: Brent crude hovering near $103 per barrel amid geopolitical tensions in West Asia and potential supply disruptions around the Strait of Hormuz has renewed concerns regarding domestic inflation and import bills.
• Currency Weakness: The Indian rupee fell 14 paise to trade at 92.42 against the US dollar, pressured by high crude import demand and foreign fund outflows ahead of key global macroeconomic events.
• Fed Policy Anticipation: Cautious sentiment prevailed as the US Federal Reserve commenced its two-day policy meeting, with investors awaiting updated interest rate projections and economic outlooks.
• Derivatives Expiry: Positioning adjustments tied to the weekly derivatives expiry added an extra layer of intraday volatility.

Sectoral Trends and Stock Action

Losses among large caps were paced by IT, healthcare, and non-banking finance names. Wipro, Cipla, and Bajaj Finance featured among the primary laggards in the Nifty 50 basket, falling by up to 3 percent.

Bucking the downward trend, select metal and materials stocks found support. Tata Steel was among the top gainers, rising by up to 4 percent.

Broader markets displayed relative resilience compared to headline indices. The Nifty Midcap 100 and Nifty Smallcap 100 indices held slight gains of up to 0.2 percent. Overall market breadth on the exchanges remained slightly positive, with 2,076 advancing shares against 1,632 declining shares.

Analyst Perspectives

Market experts noted that while short-covering had supported the preceding session's rise, long-term conviction remains constrained by global macro crosscurrents.

V.K. Vijayakumar, Chief Investment Strategist at Geojit Investments, pointed out that lingering geopolitical uncertainty continues to weigh on investor sentiment, noting that Monday's sharp jump was largely triggered by short-covering from oversold territory. He advised domestic retail investors to maintain disciplined allocations through Systematic Investment Plans (SIPs) rather than attempting to time volatile swings.

On technical levels, Anand James, Chief Market Strategist at Geojit Investments, indicated that while the Nifty's initial test of higher levels unfolded as anticipated, follow-through momentum struggled, leaving the index vulnerable to retesting support zones near 23,276. Devarsh Vakil, Head of Prime Research at HDFC Securities, added that elevated crude oil prices could influence central bank policy stances and keep monetary conditions restrictive for longer.

Tags: BSE Sensex Nifty 50 Wipro Cipla Bajaj Finance US Federal Reserve