No respite after Monday blues: Sensex slumps 568 points, Nifty below 22,650; what’s dragging the market?

Dalal Street seems to have no respite on Tuesday after a bruising start to the week, with benchmark indices extending their decline amid continued, broad-based selling across sectors. Market sentiment remained dampened by a surge in crude oil prices, geopolitical tensions, sustained selling by foreign investors and higher global bond yields.

The BSE Sensex fell 568 points, or 0.78%, to 72,203.72 at 9:43 am, after opening lower at 72,633.68. The NSE Nifty50 declined 167.10 points, or 0.73%, to 22,613.15.

The broader market also remained under pressure. The Nifty Midcap 100 declined 0.65% to 59,526.45, while the Nifty Smallcap 100 fell 0.66% to 19,222.90. Market volatility rose sharply, with the India VIX climbing 5.48% to 14.39.

On Monday, the 30-share Sensex plunged 1,124 points, or 1.52%, to 72,771.72, while the Nifty 50 tumbled 360 points, or 1.56%, to close at 22,780.25. The sharp decline wiped out ₹8.77 lakh crore in investor wealth, with the total market capitalisation of BSE-listed companies falling to ₹474.47 lakh crore from ₹483.25 lakh crore at Friday’s close.

28 out of 30 Sensex pack in red

On the BSE Sensex pack, 28 out of 30 stocks were trading in the red, barring Sun Pharma and Adani Ports, which rose 0.26% and 0.08%, respectively.

Among the laggards, Bajaj Finance emerged as the biggest loser, declining 2.02%, followed by HDFC Bank, which fell 1.57%. Kotak Mahindra Bank declined 1.38%, while Infosys and Asian Paints slipped 1.21% and 1.17%, respectively. HCL Technologies was down 1.17%, while Reliance Industries declined 1.15%.

Axis Bank fell 1.14%, M&M declined 1.05%, and NTPC dropped 1%. Trent, UltraTech Cement, Eternal and Tata Steel were also among the stocks trading lower.

Other major constituents, including Tech Mahindra, TCS, Bajaj Finserv, SBI, Power Grid, Hindustan Unilever, ICICI Bank, Maruti and Titan, also remained under pressure.

The market saw selling across most sectors, with financial and technology stocks bearing the brunt of the decline. The Nifty Private Bank index fell 0.93%, while the Nifty Financial Services 25/50 index declined 0.86%. The Nifty IT index was down 0.57%, while the Nifty Auto, PSU Bank, Metal, Oil & Gas and FMCG indices also traded lower.

The Nifty Media index was the biggest sectoral laggard, falling 1.19%, followed by Private Bank and Financial Services. The Nifty Healthcare index rose 0.34%, while the Nifty Pharma index gained 0.48%, providing some support to the broader market.

Analysts see cautious trade, crude and yields remain key

Analysts expect markets to remain cautious in the near term, with elevated crude prices, geopolitical uncertainty and higher global bond yields weighing on sentiment.

V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said the global macro backdrop remains unfavourable, with Brent crude above $106 and the US 10-year Treasury yield at 5.23%. Elevated crude could increase fiscal pressure and weigh on India’s growth and corporate earnings in FY27, he said. However, the correction has made some large-cap growth stocks attractive for long-term investors.

Ponmudi R, CEO of Enrich Money, said elevated crude prices, uncertainty over the US-Iran conflict and higher global bond yields are likely to keep Indian markets volatile. Stronger-than-expected August IIP growth, however, could reinforce confidence in domestic growth momentum, he added.

On the technical front, Hemang Gor, Senior Research Analyst – Derivatives and Technical Research at Axis Direct, said immediate support for the Nifty lies at 22,750–22,700, with a break exposing 22,500. Resistance is placed at 22,950–23,000, followed by 23,120. Any easing in crude or Treasury yields could help stabilise the market.

Shrikant Chouhan, Head of Equity Research at Kotak Securities, said the market has entered temporarily oversold territory, raising the possibility of a near-term pullback. He identified 22,800 as the key level, with support at 22,650–22,550 and resistance at 23,000–23,050.

(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)