Sensex, Nifty pull back from peaks as profit booking, weak rupee & FII outflows hit sentiment

Indian Equity Benchmarks Decline Amid Volatility

The Indian equity market experienced a decline on Tuesday, pressured by heightened volatility, continued profit-booking after scaling record highs in the previous session, and persistent selling by foreign institutional investors (FIIs).

Key Market Indicators

• The 30-share BSE Sensex pack slipped 503.63 points or 0.59% to end at 85,138.27.
• The broader NSE Nifty index also declined, losing 143.55 points or 0.55% to settle at 26,032.20.

Market Analysis

Market breadth remained weak, reflecting the cautious sentiment across sectors. A total of 1,482 stocks advanced on BSE, while 2,677 declined and 157 remained unchanged.

Domestic indices continued to witness profit booking amid worries over the weakening rupee and persistent FII outflows, said Vinod Nair, Head of Research at Geojit Investments.

Expert Insights

• Vinod Nair, Head of Research at Geojit Investments: "NSE's sectoral index overhaul in line with Sebi regulations led to corrections in major banking counters. In the near term, fading expectations of an RBI rate cut owing to strong GDP data and the uncertainty around US-India trade discussions may keep investors on edge. Even so, solid domestic macro fundamentals and a strengthening earnings outlook for the second half of the fiscal year are likely to lend support going forward."
• Amruta Shinde, Technical & Derivative Analyst at Choice Broking: "The index now faces immediate resistance at 26,150–26,200, and a breakout above this band could allow a recovery toward 26,300. Support levels are seen at 25,900 and 25,800. Despite the correction, the broader trend remains constructive as long as the index sustains above the 26,000 psychological mark."

Technical Analysis

Nifty50 extended its corrective phase, marking its fourth consecutive session in the red -- indicating rising short-term weakness and fatigue near record highs.

• Volatility softened further, with India VIX declining 3.41% to 11.23, indicating a drop in hedging demand and a relatively calm market environment despite the correction.
• Derivatives data highlighted aggressive call writing at the 26,100 strike and strong put OI buildup at 26,000, pointing to a narrow, range-bound setup in the near term.
• A sustained close above 26,300 will remain essential to revive bullish momentum in the upcoming sessions.