Benchmark indices witnessed heavy selling on Tuesday, with the Sensex plunging nearly 900 points and the Nifty slipping below the 23,850 mark as investors booked profits after a recent rally and reacted to weak economic data, global uncertainty and continued pressure on technology stocks.
The S&P BSE Sensex dropped 893.39 points, or 1.16%, to close at 76,200.68, while the NSE Nifty50 fell 278.80 points, or 1.16%, to settle at 23,824.10.
The selloff came after a strong seven-session rally that had been driven by easing tensions in West Asia, lower crude oil prices and moderating foreign investor outflows.
Markets turned sharply lower in afternoon trade after fresh data showed India’s private sector activity slowed in June.
Services activity fell to a 17-month low, while manufacturing growth eased to a three-month low, raising concerns about the pace of economic momentum.
The weaker-than-expected data prompted investors to lock in profits after the recent rally and adopt a more cautious stance.
Technology stocks continued to be one of the biggest drags on the market.
The Nifty IT index ended down 2.23%, making it one of the worst-performing sectoral indices of the day.
Among Sensex constituents, Infosys fell 3.36%, TCS declined 3.16%, HCLTech dropped 1.79% and Tech Mahindra lost 1.31%.
The sector continues to face pressure from the global technology selloff and concerns that artificial intelligence-led disruption could impact growth prospects for Indian IT services companies.
Rising US bond yields and uncertainty around the Federal Reserve’s rate trajectory have also weighed on investor sentiment towards technology stocks.
Metal stocks witnessed the sharpest sectoral decline.
The Nifty Metal index plunged 3.22% as investors worried about weakening global demand and softer commodity prices.
Tata Steel emerged among the biggest losers on the Sensex, falling 2.66%.
The decline reflects broader concerns about the global economic outlook and slowing industrial demand.
The weakness was widespread across Dalal Street.
The Nifty Financial Services index fell 1.12%, while PSU Bank stocks declined 1.97%.
Nifty Media dropped 1.47%, Nifty Consumer Durables fell 1.50% and Nifty Realty slipped 1.12%.
Broader markets also ended lower, although they outperformed benchmark indices.
The Nifty Midcap 100 fell 1.05%, the Nifty Midcap 50 lost 0.90%, while the Nifty Smallcap 100 declined 0.48%.
India VIX rose 8.56%, signalling heightened market volatility and investor nervousness.
Defensive sectors attracted buying interest amid the broader selloff.
The Nifty Pharma index rose 0.92%, while the Nifty Healthcare Index gained 0.54%.
Among Sensex constituents, Power Grid rose 0.83%, Axis Bank gained 0.28% and Sun Pharma added 0.23%.
Infosys led the losses, falling 3.36%, followed by TCS (-3.16%), BEL (-2.67%), Tata Steel (-2.66%), Adani Ports (-2.42%), Eternal (-1.84%), HCLTech (-1.79%) and SBI (-1.63%).
The sharp fall in technology and metal stocks accounted for a significant portion of the benchmark’s decline.
Vinod Nair, Head of Research at Geojit Investments Limited, said market sentiment weakened as early gains failed to hold amid negative global cues and profit booking after the recent rally.
“Most sectoral indices ended in red, with metals recording the sharpest decline due to falling global prices and demand concerns amid an uncertain global outlook. The domestic IT sector also remained under pressure, reflecting the global tech rout and persistent concerns over AI-led disruptions in the Indian IT space,” he said.
According to Nair, stable crude oil prices and easing geopolitical tensions offered some support, but investors remained focused on the progress of the monsoon and ongoing US-India trade discussions.
With Brent crude remaining below $80 per barrel and geopolitical tensions easing, market attention is now shifting towards domestic growth indicators, monsoon progress and global monetary policy signals.
Investors will also closely track US Federal Reserve commentary, foreign investor flows and corporate earnings for further cues on market direction.
For now, Tuesday’s sharp decline suggests that after a strong rally, markets may enter a consolidation phase as investors reassess valuations and macroeconomic risks.
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