Benchmark indices opened marginally lower on Tuesday as investors paused after a strong seven-session rally, with weakness in information technology (IT) stocks offsetting support from lower crude oil prices and easing tensions in West Asia.
The S&P BSE fell 77.92 points, or 0.10%, to 77,016.15 in early trade, while the NSE Nifty50 slipped 18.90 points, or 0.08%, to 24,083.35.
The cautious start comes after a strong rally that saw the Nifty gain 4.1% and the Sensex rise 4.4% over the previous seven sessions, supported by falling crude oil prices, a stronger rupee and moderating foreign investor outflows.
Technology stocks were the biggest pressure point for the market.
The Nifty IT index fell 1.30%, making it the worst-performing sectoral index in early trade.
Among Sensex constituents, Infosys dropped 2.20%, TCS fell 1.40%, HCLTech declined 1.20% and Tech Mahindra slipped 0.71%.
The weakness in IT stocks comes amid concerns over elevated US bond yields and uncertainty surrounding the trajectory of US interest rates.
Defensive sectors helped limit the downside.
Nifty Midsmall Healthcare rose 1.38%, Nifty Pharma gained 1.18%, Nifty Healthcare advanced 1.01% and Nifty 500 Healthcare climbed 1.09%.
Nifty Media was up 0.40%, while Nifty Realty gained 0.44%.
Among Sensex stocks, Trent led the gainers with a rise of 1.44%, followed by Sun Pharma (+0.80%), Eternal (+0.57%), Adani Ports (+0.53%), Power Grid (+0.47%) and ICICI Bank (+0.43%).
Despite the weakness in frontline indices, broader markets continued to show resilience.
The Nifty Smallcap 100 rose 0.20%, while the Nifty Midcap 50 gained 0.13% and the Nifty Midcap 100 added 0.12%.
This suggests investors continue to favour select mid- and small-cap stocks even as benchmark indices consolidate after their recent run-up.
India VIX declined 0.97% to 12.72, indicating that market volatility remains under control.
Crude oil prices remained supportive for Indian equities.
Brent crude fell 1.5% to $79.36 per barrel, while WTI crude traded at $75.63.
Lower oil prices are expected to ease inflationary pressures, support the rupee and improve India’s macroeconomic outlook.
Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the sharp fall in crude oil prices and improving prospects for peace in West Asia have strengthened the outlook for economic growth and corporate earnings in FY27.
However, he warned that the progress of the southwest monsoon has emerged as the key risk for markets.
“The concern now is the poor monsoon so far this season. The deficit now is huge at 42.2%. These are early days and the deficit may be compensated. But if the feared super El Nio leads to a sharp shortfall in monsoon, it can be negative for growth and inflation,” he said.
According to Vijayakumar, a weak monsoon could impact rural demand and sectors such as FMCG, making rainfall trends an important factor to watch in the coming weeks.
Apart from the monsoon, global investors will closely monitor commentary from the US Federal Reserve ahead of its July policy meeting.
With US inflation remaining elevated and the 10-year Treasury yield hovering around 4.5%, any indication of a prolonged higher-rate environment could influence global equity markets, including India.
For now, analysts believe the market is undergoing a healthy consolidation phase after a strong rally, with lower crude prices, rupee stability and easing foreign outflows continuing to provide support.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)