Benchmark indices Sensex and Nifty tumbled on Thursday, halting a three-session winning streak, as weak global signals and heavy selling in metal stocks dragged the market lower.
After a subdued start,
the Sensex slid 421.55 points, or 0.5 per cent, to 83,396.13. The Nifty50 fell 139.05 points, or 0.54 per cent, to 25,636.95.
The decline was broad-based, with pressure extending to mid- and small-cap counters. The Nifty Midcap 100 index dropped 1 per cent, while the Nifty Smallcap 100 index shed 1.5 per cent.
Among Nifty50 constituents, Hindalco Industries, InterGlobe Aviation and Tata Motors Passenger Vehicles were key laggards, falling up to 4 per cent. On the positive side, Hindustan Unilever and State Bank of India gained as much as 2 per cent. Market breadth remained weak, with about 1,368 stocks advancing, 1,997 declining and 159 unchanged.
What weighed on the market?
1) Metal sell-off
Metal shares led losses, with the sectoral index slipping nearly 2 per cent in line with softer global metal prices. The index had rallied around 6 per cent over the previous three sessions.
2) Profit booking after rally
Investors booked profits following the recent surge driven by optimism around the India–US trade pact. Most sectoral indices traded in the red, barring IT and PSU banks. The IT index edged higher after plunging nearly 6 per cent in the prior session on fears of AI-led disruption after Anthropic unveiled automation tools.
“There are some significant near-term trends. The Nifty seems to be consolidating without major index moves, but internal shifts are sharp, especially in IT stocks following the US tech sell-off,” said VK Vijayakumar, Chief Investment Strategist at Geojit Investments.
3) Weak global cues
Asian markets were largely negative, with South Korea’s Kospi plunging over 3 per cent. Japan’s Nikkei 225, Shanghai’s SSE Composite and Hong Kong’s Hang Seng also traded lower. In the US, the Nasdaq dropped 1.51 per cent and the S&P 500 fell 0.51 per cent, though the Dow Jones rose 0.53 per cent. Wall Street futures were also in the red.
4) Tepid FII inflows
Foreign institutional investors were marginal net buyers on Wednesday, purchasing equities worth Rs 29.79 crore — sharply lower than Tuesday’s inflows of Rs 5,236.28 crore.
5) RBI policy caution
Investors remained cautious ahead of the RBI’s monetary policy outcome. The six-member MPC, chaired by Governor Sanjay Malhotra, began its meeting on Wednesday, with the decision due Friday. An SBI report expects the central bank to hold rates steady.
6) India VIX rises
India VIX, a gauge of market volatility, moved higher to 12.28, signalling increased investor nervousness and the possibility of sharp intraday swings.
7) Derivatives expiry volatility
Thursday’s Sensex derivatives expiry added to volatility, as position unwinding and rollovers often trigger sharp moves.
Despite the day’s drop, the Sensex and Nifty have gained roughly 3.8 per cent over the past three sessions, buoyed by optimism over the US trade agreement that lowered tariffs on Indian goods.
Technical view
FundsIndia Equity Research noted that although a bullish candlestick pattern formed on the daily chart, selling pressure may emerge at higher levels. With India VIX above 12, volatility remains elevated. The short-term trend stays bearish and may turn bullish only on a sustained move above 25,300. The 9-day SMA stands at 25,185.
Shrikant Chouhan, Head of Equity Research at Kotak Securities, said resistance lies around 25,800/83,900 (50-day SMA). A breakout above could push the index toward 25,900–26,000/84,200–84,500. On the downside, a fall below 25,600/83,100 may drag the market to 25,500–25,350/82,800–82,500. He added that a level-based trading approach suits the current non-directional market.
