Closing Bell: Sensex ends 1,282 pts lower, Nifty sheds 1.4% to settle below 24,600; what fuelled the sell-off at Dalal Street?

Reversing half of the India-Pakistan ceasefire-led rally in the previous session, India's share market ended lower on Tuesday as investors resorted to profit booking and took some breather after reduction in trade war tensions and India-Pakistan geopolitical stress. The sell-off was seen in large-cap stocks, while mid- and small-cap segments continued to gain traction as retail investors buy beaten-down stocks.

The BSE Sensex tumbled 1,281.68 points, or 1.5%, to close at 81,148.22 levels, and the NSE Nifty50 settled at 24,578.35, down by 346.35 points, or 1.39%. However, the broader markets showed resilience and ended in positive terrain, with the BSE Midcap closing 0.17% higher and the BSE Smallcap climbed 0.99%.

"This divergence is expected to persist, supported by broad-based earnings improvements reflected in Q4 results so far,” says Vinod Nair, Head of Research, Geojit Investments.

Nair further said that midcaps are well-positioned to catch up and potentially outperform in the coming quarters. This was attributed to increasing optimism around FY26 earnings growth, underpinned by supportive fiscal and monetary policies, a rebound in external demand, a favorable monsoon outlook, and declining inflation and interest rates.

On the BSE Sensex pack, 25 out of 30 stocks ended lower, led by Infosys, HCL Tech, Power Grid, Eternal (Zomato), and TCS, falling in the range of 2.8-3.6%.

On the other hand, Sun Pharma, Adani Ports, Bajaj Finance, State Bank of India and Tech Mahindra were among top gainers, rising up to 1%.

Among the sectoral indices, Nifty Auto, financial services, FMCG, and IT emerged as top laggards, falling over 1% each. Among others, Nifty bank, metal, oil & gas, realty and consumer durables also ended in red. On the flip side, Nifty PSU Bank, media, pharma, defence, and healthcare saw spurt in buying, rising up to 1.7%.

India VIX, which measures the market volatility, dropped 1.05% to 18.20 points, indicating ease in tensions and market stability.

Technically, after a muted open, the market consistently faced selling pressure at higher levels. On daily charts, the benchmark indices have formed a bearish candle, which supports temporary weakness. However, the short-term texture of the market is still in to the positive side, said Shrikant Chouhan, Head-Equity Research, Kotak Securities. 

For traders now, 24,500/81000 and 24,450/80800 would act as key support zones for Nifty and Sensex. If the market succeeds in trading above these levels, it could retest the level of 24,800–24,900/81800-82000. On the flip side, below 24,450/80800, the uptrend would become vulnerable. “If the market falls below this level, traders may prefer to exit their long positions,” Chouhan said.

Ajit Mishra – SVP, Research, Religare Broking, said the dip in the index 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. The focus should remain on identifying key sectors and themes showing relative strength and using intermediate pauses to accumulate quality stocks."

(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.)