Sensex Drops 600 Pts, Nifty Slips Below 24,850: 3 Reasons Behind Tuesday’s Market Fall

Sensex, Nifty today: The overall mood of D-street remained largely subdued on Tuesday, as profit booking and BSE monthly expiry pulled down the market movement. Benchmark indices concluded the trading session on a volatile note with the BSE Sensex dropping over 1,000 points from the day's high, before erasing some losses.

NSE Nifty50 ended the trading session at 24,826.20 mark, down by 174 points or 0.7%. Whereas, the 30-share index, BSE Sensex, concluded the day 81,551.63 level mark, down by over 600 points or 0.76%. Nearly all stocks from the Sensex pack remained in red except IndusInd Bank, Sun Pharma, Adani Ports, Nestle India and Asian Paints. UltraTech cement, ITC, Tata Motors were among the biggest losers.

On the geopolitical front, Trump implemented a delay on the imposition of EU tariffs. However, it failed to lift the overall market sentiment. Sectorally, performance displayed a mixed picture. "PSU Banks and Realty stocks stood out with positive momentum, while major weakness was visible in Consumer Goods, IT, Auto, Consumption and Financial Services sectors," said Sundar Kewat, technical and derivatives analyst-Institutional Equity, Ashika Stock Broking.

While the PSU Bank index saw a minor surge and remained the best-performing index of the day, the Nifty FMCG plunged over 500 points or 0.88%.

Here's what pulled down the overall market mood-

1. Profit-Booking

While benchmarks initially started the trading session in green, profit-booking later took on the overall sentiment, pushing the markets in bear territory. Interestingly, small-cap and mid-cap stocks remained resilient.

"The domestic market witnessed volatility and snapped a two-day rally, as investors opted for profit booking driven by valuation concerns and weakness across Asian markets. The benchmark index once again failed to decisively breach the 25k resistance level, reflecting the absence of positive triggers," said Vinod Nair, head of research, Geojit Investments Ltd.

2. Mixed Q4 Earnings

While D-Street analysts had already priced in a muted performance by India Inc in Q4, some results came in worse than expected. This further added pressure on the overall investor mood, eventually pulling down the benchmarks in the bear territory.

"Large-cap stocks underperformed, weighed down by subdued FII participation and lacklustre earnings from blue-chip companies. Conversely, mid- and small-cap segments remained relatively resilient, supported by better than estimated Q4 earnings and moderation in premium valuation," said Nair.

3. Waning Bullish Sentiment

"The Nifty has been consolidating for the past 10–11 days, setting an indecisive tone among investors. However, the overall trend remains strong as the index continues to sustain above the short-term moving average. The RSI is showing signs of fatigue and is turning downward, indicating waning bullish momentum," said Rupak De, Senior Technical Analyst at LKP Securities. The month of May initially saw steady momentum in the benchmarks, with Sensex and Nifty experiencing an upward trajectory in the first few weeks. However, the markets later began consolidating the uptrend.

The short-term outlook remains positive, with the potential to reach the 25,000–25,150 range. On the lower end, support is placed at 24,700, Rupak De added.