India equity indices: Indices decline over 1% amid global market concerns and profit booking

Mumbai: India’s equity indices fell more than 1% on Tuesday, although the gauges recouped some losses through a choppy trading session marked by weak global cues and profit-booking in heavyweight sectors ahead of the monthly expiry. Analysts said the undertone remains bullish, despite Tuesday’s slide.

The NSE Nifty fell 0.7%, or 174.95 points, to finish at 24,826.20. The BSE Sensex moved 0.8%, or 624.82 points, lower at 81,551.63.

“The market was jittery amid global nervousness due to lack of clarity on Donald Trump’s tariffs, and trade agreements. With the F&O expiry coming up, investors remained cautious,” said Siddartha Khemka, Head of Retail Research, Motilal Oswal Financial Services.

A lack of positive triggers at the tail end of the earnings season on the domestic front also caused the gauges to lose momentum, said Khemka.

The Nasdaq Composite Index fell 1% while the Dow Jones Industrial Average declined 0.6%, on Friday. The US markets were closed Monday for the Memorial Day holiday.

In Asia, China and Taiwan fell 0.2% and 0.9%, respectively, while South Korea declined 0.3%. Japan rose 0.5% and Hong Kong rose 0.4%. Analysts said that heavyweight sectors, such as banking, IT and FMCG that together make up almost 60% of the benchmark, witnessed profit booking due to the monthly expiry.”The markets were trading lower after testing 25,050 levels during the day and the call concentration and open interest was highest at these levels in Nifty,” said Vikas Jain, head of research, Reliance Securities. “The rollover moved up to almost 48% from 35%.”

The Volatility Index or VIX – the market’s fear gauge – gained 2.85% to 18.5 on Tuesday, indicating traders expect higher risks in the near term.

Nifty FMCG and IT indices fell 0.9% and 0.8%, respectively, while Bank Nifty moved 0.4% lower. Nifty Auto Index declined 0.7%. The broader market bucked the downtrend and ended higher with the Nifty Mid-cap 150 index advancing 0.21% while the small-cap 250 index ended 0.11% higher. In past week, the mid-cap index and small-cap index rose 1.8% and 1.6%. “While headline indices witnessed profit-booking due to weak global cues, broader market witnessed good momentum supported by institutional buying in selective sectors,” said Khemka.

“IPOs have started coming up which indicates broader market strength.” Out of the 4,084 shares traded on BSE, 1,897 advanced, while 2,053 declined. Foreign portfolio investors (FPIs) bought shares worth a net Rs 348.5 crore on Tuesday. Their domestic counterparts bought shares worth Rs 10,104.6 crore. In May, overseas investors bought Rs 15,132.3 crore. Technical analysts said 24,650 is a key level on the downside and if benchmark Nifty breaches this level, then further corrections are possible till 24,300 levels. However, the momentum is positive.