Indian markets dip as profit-booking and financial weakness hit stocks

The benchmark NSE Nifty 50 index witnessed a decline of 0.99%, closing at 21,522.10 points, while the S&P BSE Sensex fell by 1.11% to 71,139.90 points.

Indian shares experienced a downturn on Tuesday, driven by profit-booking activities and weakness in financial stocks, particularly Bajaj Finance. The market sentiment was dampened by profit-taking in index heavyweights such as Reliance Industries and HDFC Bank, following a notable surge in the previous session.

The benchmark NSE Nifty 50 index witnessed a decline of 0.99%, closing at 21,522.10 points, while the S&P BSE Sensex fell by 1.11% to 71,139.90 points. Both indices had recorded a significant uptick of approximately 1.8% on Monday, marking their strongest session in eight weeks.

Sanjiv Hota, Vice President and Head of Research at Sharekhan, attributed the market slide to profit booking activities, particularly in index heavyweights like Reliance Industries and HDFC Bank, as well as across the broader market, following Monday’s surge.

Reliance Industries, a key constituent of the Nifty 50, registered a decline of 2.79%, exerting downward pressure on the energy index, which fell by 1.69%. The conglomerate had witnessed a remarkable surge of 7.02% to reach a record high in the preceding session.

Similarly, HDFC Bank, another heavyweight on the Nifty 50, witnessed a decline of 0.71% after posting a gain of 1.38% on Monday. Together, Reliance Industries and HDFC Bank command a weightage of 22.72% on the Nifty 50 index.

The financial sector, represented by the highest-weighted sector financials, also experienced a decline of 0.63%. Bajaj Finance emerged as the top loser among Nifty 50 stocks, plummeting by 5.21% to touch a five-month low. The decline was attributed to the company’s quarterly profit growth falling below expectations, coupled with a deterioration in asset quality.

Sanjiv Hota highlighted expectations of heightened volatility in the near term, driven by key events such as the U.S. Federal Reserve’s policy decision and commentary scheduled for Wednesday, along with India’s interim union budget announcement on Thursday.

The Nifty volatility index surged by 16.14% over two sessions this week, reaching a 10-month high of 16.10. Analysts anticipate that the Federal Reserve’s commentary will provide insights into the rate path, influencing foreign investor strategy and the short-term trajectory of the markets.

Amidst the broader market downturn, Bharat Petroleum Corporation (BPCL) stood out, gaining 2.34% on the day. The positive momentum extended a post-results rally into the second session for the company.

As investors navigate through a period of heightened volatility and uncertainties surrounding key events, market participants remain cautious, closely monitoring developments both domestically and globally for potential market implications.