Closing Bell: Sensex, Nifty drop 1% amid broad-based sell-off; Zomato, Maruti, M&M, UltraTech, Power Grid lead fall

Indian share market witnessed broad-based selling on Tuesday, with the benchmark indices BSE Sensex and NSE Nifty falling over 1% as investors booked profit amid lack of major positive triggers and prevailing uncertainty over U.S. fiscal stability. After making a muted start, the domestic bourses saw a surge in selling during late trade as sentiment was dented due to persistent uncertainty on the India-U.S. trade deal.

The BSE Sensex tumbled 873 points, or 1.06%, to settle at 81,186, and the Nifty50 ended 262 points, or 1.05%, lower at 24,684. The broader market also settled in negative terrain, with the Nifty Midcap100 and Smallcap100 indices sliding by 1.62% and 0.94%, respectively.

On the BSE Sensex pack, barring Tata Steel , Infosys , and ITC , all other 27 constituents ended in the red. The top five losers were Eternal (Zomato) , Maruti Suzuki India , Mahindra and Mahindra , UltraTech Cement , and Power Grid Corporation , falling in the range of 2-4%.

On the other hand, Tata Steel, Infosys, and ITC ended marginally above the base line, paring early gains.

On the sectoral front, weakness was widespread as all indices closing in the red. The worst-hit sectors included automobile, consumption, healthcare, media, and financial services, reflecting heavy profit booking.

“Selling pressure was widespread as participants awaited more clarity on the India-U.S. trade agreement. Given the current premium valuations and delays in the trade deal, we foresee a phase of short-term consolidation, which may lead FIIs to scale back their positions in the domestic market," said Vinod Nair, Head of Research, Geojit Investments.

Ajit Mishra – SVP, Research, Religare Broking, said the decline reflects rising caution among market participants in the absence of any major domestic triggers and amid global uncertainties. Intermediate volatility in the US markets and concerns over the potential impact of the US-China trade deal on foreign institutional inflows into emerging markets, including India, also weighed on sentiment, he said.

“We believe investors should not overreact to the recent dip and instead wait for clearer signals. While the breach of the 24,800 mark in Nifty has dampened near-term momentum, the short-term trend remains positive as long as the index holds above the 24,400 level decisively. In the meantime, we advise traders to avoid aggressive long positions and focus on sectors or themes that are showing relative strength,” he added.

Technically, Nifty slipped today after two days of consolidation, bogged down by broad-based selling and weakening market breadth, said Rupak De, Senior Technical Analyst at LKP Securities.

“Despite this decline, the short-term trend remains strong, although there is a possibility of a deeper pullback toward the 21-day EMA on the daily timeframe. The negative divergence on the daily RSI has added to the bearish sentiment. If Nifty sustains below 24,700, the correction could extend further, potentially towards 24,300. However, if the index moves back above 24,700, it may signal a return to a consolidation phase," De pointed out.  

On the derivatives front, the market breadth was extremely weak, with only 18 stocks advancing against 202 declining. Open interest spurt was seen in RBL Bank, Zydus Life, DLF, Astral, and Hindalco. “The highest open interest buildup on the call side is at 25,000, while put writing is concentrated at 24,500 and 24,000, indicating key support zones ahead. The Put-Call Ratio (PCR) dropped to 0.48,” said Sundar Kewat, Technical and Derivatives Analyst, Ashika Institutional Equity.