Sensex slides 500 points, Nifty dips below 26,150 as profit booking, global worries weigh on markets

Indian equity benchmarks extended losses on Tuesday as investors booked profits in heavyweight stocks, while foreign fund outflows, geopolitical concerns and rising volatility dampened sentiment.

At around 2:15 pm, the Sensex was down 479.6 points, or 0.56 percent, at 84,960, while the Nifty 50 slipped 111.8 points, or 0.43 percent, to 26,138, falling below the crucial 26,150 mark.

Heavyweights such as Trent, Reliance Industries and Tata Motors Passenger Vehicles dragged the Nifty lower, declining up to 8 percent. On the other hand, Hindalco Industries and Apollo Hospitals Enterprise gained up to 4 percent. Market breadth remained weak, with declining shares outnumbering advances.

Five key factors behind the market decline

1) Profit booking in heavyweight stocks

Shares of HDFC Bank, the largest stock on the benchmark indices, fell nearly 2 percent and hit a three-month low. The stock has declined over 4 percent in the past two sessions following the bank’s provisional business update for the December quarter.

India’s largest private lender reported 11.9 percent year-on-year loan growth and 11.5 percent deposit growth. Analysts at Nomura noted that slower deposit growth constrained lending, with the credit-deposit ratio nearing 100 percent, highlighting the need for stronger deposit inflows to support future loan growth.

2) Tariff concerns resurface

Market sentiment was further hit after US President Donald Trump warned that tariffs on Indian goods could be increased if India does not reduce its purchases of Russian oil, reviving trade-related uncertainties.

3) Foreign fund outflows

Foreign institutional investors (FIIs) turned net sellers, offloading equities worth Rs 36.25 crore on Monday after a brief pause. Continued FII selling has pressured domestic markets by reducing liquidity and weakening investor confidence.

4) Geopolitical tensions

Rising geopolitical uncertainty also weighed on sentiment following the arrest of Venezuelan President Nicolas Maduro.

Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said heightened uncertainty calls for caution. “Unprecedented geopolitical events demand a cautious investment approach, supported by higher cash positions to take advantage of sudden market movements,” he said.

5) Spike in volatility

The India VIX rose over 2 percent for the third consecutive session and has gained more than 10 percent in the last three days, signalling growing nervousness and expectations of sharper market swings.

Technical view

According to Aakash Shah, Technical Research Analyst at Choice Equity Broking, the Nifty remains in a consolidation phase.

“Immediate support is seen in the 26,100–26,150 zone, while resistance lies around 26,400–26,450. A decisive breakout above resistance could push the index towards 26,500, while failure to sustain higher levels may keep the market range-bound,” he said, advising traders to trail positions and avoid chasing sharp moves.

Disclaimer: The views expressed are those of market experts and do not represent the views of this publication. Investors are advised to consult certified financial advisors before making investment decisions.