Sensex, Nifty Fall as Markets Snap 7-Day Rally on Weak Sentiment

Indian equity benchmarks Sensex and Nifty 50 closed lower on Tuesday, snapping a seven-day rally as selling pressure intensified across sectors. Market sentiment weakened due to concerns over the impending imposition of U.S. tariffs, fluctuations in the Indian rupee, and rising crude oil prices, triggering profit booking.

The BSE Sensex started strong, reaching an intraday peak of 78,167.87. However, selling in heavyweight stocks pushed the index lower, resulting in a sharp decline. Similarly, the NSE Nifty 50 initially showed gains but failed to sustain momentum, slipping below the key 23,500 mark.

By the close, Sensex had fallen 728.69 points or 0.93 per cent to settle at 77,288.50, while Nifty dropped 181.80 points or 0.77 per cent, finishing at 23,486.85. Market breadth reflected the downtrend, with 892 stocks advancing, 2,992 declining, and 100 unchanged.

All sectoral indices closed in negative territory, with Nifty Media, Nifty PSU Bank, and Nifty Realty facing the steepest declines, shedding 1-2 per cent.

Among the top Nifty gainers were IndusInd Bank, Trent, Hero MotoCorp, HCLTech, and Bharti Airtel. On the losing side, NTPC, Tech Mahindra, Cipla, BPCL, and Bajaj Finance recorded significant declines.

Broader markets followed the downtrend, with the BSE Midcap index slipping 0.7 per cent and the Smallcap index losing 1.5 per cent, underscoring weak market sentiment.

Several stocks, including Aavas Financiers, Chambal Fertilisers, SBI Card, and TCPL Packaging, touched their 52-week highs despite the broader decline.

Shrikant Chouhan, Head of Equity Research at Kotak Securities, noted that indices faced selling pressure at higher levels, forming a bearish candle on daily charts. Technical indicators suggest continued weakness if Nifty trades below 23,600 and Sensex below 77,500. Downside targets include 23,400-23,330 for Nifty and 77,000-76,800 for Sensex. A reversal above 23,600 or 77,500 may trigger recovery towards 23,700-23,760 and 77,800-78,000, respectively.

Hrishikesh Yedve, AVP at Asit C. Mehta Investment Intermediates, observed that Nifty broke below its 100-Day Simple Moving Average (100-DSMA) at 23,500, now acting as immediate resistance, followed by 23,800. On the downside, key support levels are the 100-Day Exponential Moving Average (100-DEMA) at 23,390 and the 75-DEMA at 23,250. Increased volatility is expected due to F&O expiry.

The Bank Nifty index opened positive but encountered profit booking, closing at 51,209. The formation of a red candle on daily charts indicates further weakness. Key support levels include the 200-Day Simple Moving Average (200-DSMA) at 50,990 and the recent breakout point at 50,640, while resistance levels are placed at 51,880 and 52,000.

Rupak De, Senior Technical Analyst at LKP Securities, pointed out that Nifty breached the 23,600 support level, extending losses towards 23,400. The index has fallen below near-term moving averages, with a negative crossover in the hourly RSI (14). If the decline extends below 23,300, it may raise concerns about the sustainability of the recent rally from 21,964. Resistance is seen at 23,550, and a move above this level could improve market sentiment.