surrendered early gains to close in the red on Tuesday as profit booking in banking and heavyweight stocks triggered a sharp reversal, with the plunging over 700 points from its intraday peak amid volatile trading on the first Tuesday expiry under the new weekly derivatives settlement cycle.
The BSE Sensex closed 206.61 points or 0.26 per cent lower at 80,157.88, while the dropped 45.45 points or 0.18 per cent to 24,579.60. The benchmark indices had opened positively with Sensex starting at 80,520.09 against its previous close of 80,364.49, and Nifty opening at 24,653.00 compared to the previous close of 24,625.05.
“Today, the benchmark indices experienced profit booking at higher levels. The Nifty closed 45 points lower, while the Sensex was down by 207 points,” said Shrikant Chouhan, Head Equity Research, Kotak Securities. “Technically, after an intraday rally, the market faced resistance near 24,750/80,700. Due to profit booking at higher levels, it corrected sharply, shedding over 200/700 points from the day’s highs.”
Banking stocks led the decline with the Nifty Bank index dropping 341.45 points or 0.63 per cent to 53,661.00. The Nifty Financial Services index also underperformed, falling 170.55 points or 0.66 per cent to 25,572.95.
Among individual stocks, Tata Consumer Products emerged as the top gainer on Nifty 50, surging 2.77 per cent to ₹1,105.50, followed by Nestle India which gained 2.22 per cent to ₹1,200.50. Power Grid Corporation climbed 2.20 per cent to ₹286.00, while NTPC rose 1.80 per cent to ₹336.65 and Tata Steel advanced 1.46 per cent to ₹158.45.
On the downside, Dr Reddy’s Laboratories was the biggest loser, falling 2.34 per cent to ₹1,250.00, followed by Mahindra & Mahindra which declined 2.33 per cent to ₹3,238.00. ICICI Bank dropped 1.42 per cent to ₹1,391.00, Asian Paints fell 1.25 per cent to ₹2,538.00, and Cipla slipped 1.21 per cent to ₹1,568.00.
“The Nifty faced strong rejection at the 21EMA, leading to a sharp intraday fall. The market continues to remain in a sell-on-rise mode until it moves back above 24,850,” said Rupak De, Senior Technical Analyst at LKP Securities. “The daily RSI is in a bearish crossover with a reading below 50. In the short term, the trend is likely to remain weak.”
Sectoral performance was mixed with FMCG stocks leading gains for the third consecutive session. The Nifty FMCG index rose over 1 per cent, driven by expectations around upcoming GST 2.0 reforms ahead of the GST Council meeting scheduled for September 3-4. The Nifty Metal index gained 0.85 per cent, while Energy and Media indices also posted gains.
Broader markets showed resilience with the Nifty Midcap 100 gaining 0.27 per cent to 56,977.40 and the Nifty Smallcap 100 advancing 0.53 per cent. Market breadth remained positive with 2,439 stocks advancing against 1,705 declines on BSE, while 124 stocks hit 52-week highs compared to 64 touching 52-week lows.
“Domestic equities reversed early gains from strong macro data, ending lower on profit booking amid caution ahead of the GST Council meeting and F&O expiry, with banking stocks leading the decline,” said Vinod Nair, Head of Research, Geojit Investments Limited.
In currency markets, the rupee traded slightly positive at 88.16 with gains of 0.05 per cent as optimism around India’s GST reduction move supported sentiment. “The dollar remained firm at 98.30, keeping overall pressure intact on emerging currencies,” said Jateen Trivedi, VP Research Analyst at LKP Securities.
Gold prices remained volatile with minor gains at $3,481 on Comex, while on MCX, gold tested highs of ₹1,05,340 before slipping toward ₹1,04,500 on profit booking. “This week’s US data, including ISM services, trade balance, and non-farm payrolls, will be key in guiding sentiment, as Fed policy expectations remain central to the outlook,” Trivedi added.
“We believe that the intraday market remains volatile and non-directional; hence, level-based trading would be the ideal strategy for day traders,” said Chouhan. “On the lower side, 24,500/80,000 would act as a crucial support zone. Below this, the market could retest levels of 24,400-24,350/79,700-79,500.”
Looking ahead, investors will focus on the crucial GST Council meeting beginning Wednesday, monthly auto sales data, and global developments including US economic indicators that could influence Federal Reserve policy expectations and market sentiment in the near term.