The domestic equity markets witnessed sharp selling pressure on Tuesday, with both benchmark indices closing more than 1% lower amid a broad-based technology selloff, weakness in global markets and growing concerns over further monetary tightening in the United States.
Benchmark indices end deep in red
The Nifty 50 index closed at 23,824.10, down 278.80 points or 1.16%, while the BSE Sensex settled at 76,200.68, losing 893.39 points or 1.16%. Market experts said the decline was led by technology stocks, while a weaker rupee and concerns over global interest rates further dampened investor sentiment.
Ponmudi R, CEO of Enrich Money, said, "Indian equity markets snapped their recent oil-driven rally and declined sharply alongside global peers as a broad technology-led selloff weighed on sentiment. Losses were led by the IT sector, which declined more than 2%, while a weaker rupee and growing expectations of further US monetary tightening added to investor caution and weighed on overall sentiment."
Sectoral performance: IT and media worst hit
Sector-wise, almost all major indices on the National Stock Exchange (NSE) ended in negative territory. Nifty IT emerged as one of the worst-performing sectors, falling 2.23%. Nifty Media also witnessed heavy selling pressure and declined 3.22%. Nifty PSU Bank fell 1.97%, while Nifty Auto declined 0.77% and Nifty FMCG slipped 0.60%. The only sector that managed to end in positive territory was Nifty Pharma, which gained 0.92%.
Despite the weakness in equity markets, crude oil prices continued to decline. Brent crude was trading at USD 77.51 per barrel at the time of filing this report.
Profit booking and global cues weigh
According to market participants, investors were also booking profits after the recent rally, leading to increased volatility in the market. Riyank Arora, Associate Vice President - HNI & Derivatives at Hedged.in, said, "The sharp decline in benchmark indices suggests profit booking and a rise in near-term caution among market participants. Market sentiment may remain volatile over the next few sessions, with traders closely monitoring key support zones. While the broader long-term trend remains intact, the near-term structure has weakened."
Asian markets mostly lower
The weakness was also reflected across most major Asian markets on Tuesday. Except for Singapore's Straits Times index, which gained 0.03%, all major regional markets closed lower. Japan's Nikkei 225 index declined 2.98% to close at 70,260. Hong Kong's Hang Seng index fell 1.79% to 23,351. Taiwan's weighted index slipped 1.36% to close at 47,100. South Korea's KOSPI index witnessed the highest selling pressure among major Asian markets, falling more than 11% to 8,203.
