Equity benchmarks ended in the red on Tuesday, snapping a six-session winning streak as a record-high merchandise trade deficit and weak global cues triggered broad-based profit-booking across sectors, with the Sensex closing 277.93 points, or 0.33 per cent, lower at ₹84,673.02 and the Nifty declining 103.40 points, or 0.40 per cent, to 25,910.05.
The selloff gained momentum after India’s merchandise trade deficit for October widened to a record high of $41.68 billion, driven by a surge in gold imports and a sharp contraction in outbound shipments, raising concerns about the country’s external finances. “India’s merchandise trade deficit for October widened to a record high of $41.68 billion driven by a surge in gold imports and a sharp contraction in outbound shipments, underscoring concerns around the country’s external finances,” said Abhinav Tiwari, Research Analyst at Bonanza.
Market breadth remained weak throughout the session, with 2,810 stocks declining against 1,401 advances on the BSE, where 4,341 stocks were traded. Notably, 195 stocks hit their 52-week lows compared to 135 touching 52-week highs, while seven stocks hit lower circuits. Broader indices underperformed sharply, with the Nifty Midcap 100 falling 358.50 points, or 0.59 per cent, to 60,822.00, and the Nifty Smallcap 100 declining 192.85 points, or 1.05 per cent, to 18,154.75. The Nifty Next 50 dropped 510.60 points, or 0.73 per cent, to 69,643.50.
Sectorally, all major indices closed in negative territory, with realty, IT, and metal stocks bearing the brunt of selling pressure, each losing around 1 per cent. The Nifty Financial Services index declined 99.45 points, or 0.36 per cent, to 27,546.75, while the Nifty Bank index fell 63.45 points, or 0.11 per cent, to 58,899.25, despite touching a fresh all-time high of 59,103 during the session.
Among Nifty constituents, Bharti Airtel emerged as the top gainer, rising 1.60 per cent to close at ₹2,146.10, followed by Axis Bank, which gained 1.07 per cent to ₹1,263.00. Asian Paints advanced 0.65 per cent to ₹2,902.20, Shriram Finance climbed 0.62 per cent to ₹823.00, and Titan rose 0.42 per cent to ₹3,885.00.
On the losing side, Tata Consumer Products led the decline, falling 2.28 per cent to ₹1,152.00, followed by Tech Mahindra, which dropped 2.21 per cent to ₹1,420.70. Jio Financial Services declined 1.99 per cent to ₹305.80, IndiGo fell 1.95 per cent to ₹5,758.50, and Eterna (Eternal) slipped 1.63 per cent to ₹304.50.
“A sharp sell-off in global equities, driven by concerns over stretched valuations in the technology sector, sparked broad-based profit booking on the domestic bourses as well. However, Indian markets managed to limit their losses, especially when compared with over 3 per cent declines witnessed in Japan’s Nikkei and South Korea’s Kospi,” said Ponmudi R, CEO of Enrich Money.
Technical analysts pointed to the formation of a bearish engulfing pattern on the daily charts, with the Nifty facing resistance near the psychological 26,000 mark. “The Nifty remained confined within a 150-point range, marking the second consecutive day of consolidation. A bearish engulfing pattern has formed on the daily chart, suggesting a pause in the ongoing price rise,” said Rupak De, Senior Technical Analyst at LKP Securities. Nilesh Jain, Head of Technical and Derivatives Research at Centrum Broking, noted, “The market snapped its six-day winning streak, with Nifty forming a bearish engulfing candle on the daily chart, signalling a potential pause in the trend.”
Volatility ticked higher, with the India VIX rising 2.61 per cent to 12.09, reflecting increased uncertainty among traders. In the derivatives segment, significant call writing at the 26,000 strike and maximum put open interest at 25,900 signaled strong overhead supply and firm support at lower levels.
“Expectations of a U.S. Fed rate cut in December have diminished, weighing on sentiment, with IT, metal, and realty stocks declining amid a stronger dollar, while private banks offered some support,” said Vinod Nair, Head of Research at Geojit Investments. Ajit Mishra, SVP Research at Religare Broking, added, “Recent market action reflects a cautiously optimistic undertone, supported by firm domestic macro indicators. However, heightened global volatility continues to cap momentum and trigger intermittent bouts of profit-taking.”
Looking ahead, market participants expect continued consolidation, with analysts maintaining a cautiously optimistic stance. “Going forward, progress on the Indo-U.S. trade deal and a strengthening domestic earnings outlook could help revive confidence and support market momentum to convincingly cross the Nifty50 threshold of 26,000,” Nair said. Shrikant Chouhan, Head Equity Research at Kotak Securities, noted, “We are of the view that the 20-day SMA at around 25800/84500 and 25750/84300 would act as key support zones for traders. As long as the market is trading above these levels, the positive trend is likely to continue.”