Bears roar back: Sensex tumbles 893 pts, Nifty slides below 23,850; IT, metals lead decline

Indian equity benchmarks ended sharply lower on Tuesday, weighed down by heavy selling in information technology and metal stocks amid weak global cues and a risk-off sentiment across Asian markets.

The BSE Sensex tumbled 893.39 points, or 1.16%, to settle at 76,200.68, while the NSE Nifty50 dropped 278.80 points, or 1.16%, to close at 23,824.10. 

The rupee also came under pressure, declining 11 paise to settle provisionally at 94.74 against the US dollar.

IT, metals bear the brunt

Technology and metal counters led the market decline, dragging benchmark indices lower throughout the session.

The Nifty IT index fell 2.23%, with Infosys plunging 3.42%, Wipro dropping 3.21%, TCS declining 3.19% and HCLTech losing nearly 2%.

Metal stocks witnessed even steeper losses. The Nifty Metal index slumped 3.22%, making it the worst-performing sector of the day. JSW Steel and Tata Steel fell 3.10% each, while Hindalco Industries shed 2.73%.

Banking shares also remained under pressure, with the Nifty PSU Bank index declining 1.97% and Bank Nifty ending 1.30% lower.

Pharma offers defensive shelter

In an otherwise weak market, pharmaceutical stocks emerged as the preferred defensive bet for investors.

The Nifty Pharma index gained 0.92%, while the Nifty Healthcare index advanced 0.54%.

Cipla was the top gainer on the Nifty, rising 1.36%. Power Grid gained 0.95%, Dr Reddy's Laboratories climbed 0.79%, and Sun Pharmaceutical Industries added 0.22%.

The trend suggested a shift towards defensive sectors as investors reduced exposure to high-beta and cyclical stocks.

Broader markets outperform benchmarks

While frontline indices witnessed sharp declines, broader markets showed greater resilience.

The Nifty 100 fell 1.20%, the Nifty 200 declined 1.17% and the Nifty 500 lost 1.08%.

Smallcap stocks outperformed their largecap peers, with the Nifty Smallcap 100 slipping only 0.48% and the Nifty Smallcap 50 declining 0.41%, indicating that the selloff was concentrated largely in heavyweight stocks.

"Weak global cues and the global tech stock meltdown led to a correction in markets, however, over the long term India remains a safe bet due to strong growth prospects," said Ankur Punj, MD & business head at Equirus Wealth.

"Since we don’t have much of an AI focus, the tech correction will lead to global capital realignment and we will see inflows. Short-term volatility will remain but this will lead to capital inflow in the long term," he added.

Asian selloff weighs on sentiment

Market sentiment was also affected by weakness across Asian equities after South Korea's benchmark KOSPI witnessed a sharp selloff, triggering concerns around technology and semiconductor stocks across the region.

Back home, investor caution was reflected in volatility gauges as India VIX surged 8.56% to 13.94.