Analysts expect a phase of consolidation within 24,400–25,200 as global uncertainties, profit booking, and weakening technicals keep investors cautious in the near term.
| Photo Credit:
iStockphoto
Equity benchmarks tumbled over 1 per cent on Tuesday, with the BSE Sensex plunging 872.98 points or 1.06 per cent to close at 81,186.44 and the NSE Nifty 50 falling 261.55 points or 1.05 per cent to 24,683.90, as Moody’s downgrade of the US credit rating from AAA to Aa1 sparked concerns about global fiscal stability.
The markets witnessed a broad-based sell-off after briefly touching the 25,000 mark in early trade, with selling pressure intensifying in the second half of the session. All sectoral indices ended in the red, with automobile, consumption, healthcare, media, and financial services sectors facing the heaviest selling.
“Nifty opened flat at 24,996 and briefly touched a high of 25,010 before witnessing a sharp sell-off, sliding to a low of 24,676—currently trading near the day’s lowest level. The weakness was widespread, with all sectoral indices closing in the red,” said Sundar Kewat, Technical and Derivatives Analyst at Ashika Institutional Equity.
Among the top gainers on NSE, Coal India rose 1.55 per cent to ₹408.95, followed by Tata Steel up 1.28 per cent to ₹159.59, Hindalco gaining 1.16 per cent to ₹666, ONGC advancing 1 per cent to ₹249.05, and Dr. Reddy’s adding 0.49 per cent to ₹1,225.
The losers pack was led by Eternal, which plunged 4.21 per cent to ₹228, followed by Hero MotoCorp dropping 3.16 per cent to ₹4,249, Bajaj Auto declining 2.84 per cent to ₹8,600, Maruti slipping 2.69 per cent to ₹12,640, and Shriram Finance falling 2.67 per cent to ₹659.70.
Market breadth was significantly negative, with 2,534 stocks declining against 1,435 advances and 135 remaining unchanged on the BSE. Eighty-two stocks touched 52-week highs, while 29 hit 52-week lows. Eleven stocks hit the upper circuit, and seven touched the lower circuit.
“The sell-off was further intensified by foreign institutional investors (FIIs) turning net sellers and widespread profit booking following a recent rally. Heavyweights like HDFC Bank and Reliance Industries saw significant selling pressure, dragging the benchmarks lower,” noted Satish Chandra Aluri from Lemonn Markets Desk.
The broader market also faced significant pressure, with the Nifty Midcap 100 plunging 1.62 per cent to 56,182.65 and the Nifty Small cap 250 declining 0.85 per cent. The Nifty Next 50 fell 1.84 per cent to 66,165.50, Nifty Financial Services declined 1.18 per cent to 26,193.85, and Nifty Bank dropped 0.98 per cent to 54,877.35.
On the currency front, the Indian Rupee continued to weaken against the US dollar. “The Indian Rupee has faced recent headwinds, becoming one of the worst performers among Asian currencies. This depreciation is attributed to concerns over rising COVID-19 cases in some Asian regions, foreign fund outflows from domestic equities, higher global bond yields, and a general downturn in market sentiment,” said Dilip Parmar, Senior Research Analyst at HDFC Securities.
Technical analysts see further corrections ahead if key levels are breached. “Nifty formed a big red candle on the daily scale and breached the major support zone of 24,800–24,850, signalling weakness. The next major support for the index is placed near 24,390, where the 21-Day Exponential Moving Average (21-DEMA) is positioned,” said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Intermediates.
Looking ahead, market participants remain cautious amid global uncertainties. “The decline reflects rising caution among market participants in the absence of any major domestic triggers and amid global uncertainties. Intermediate volatility in the US markets and concerns over the potential impact of the US-China trade deal on foreign institutional inflows into emerging markets, including India, also weighed on sentiment,” said Ajit Mishra, SVP, Research at Religare Broking Ltd.
For the near term, analysts expect consolidation to continue. “In the near term, we expect the index to enter a consolidation phase within the 24,400–25,200 range, thereby working off the overbought conditions indicated by the daily stochastic oscillator following the recent sharp uptrend,” according to Bajaj Broking Research.
Published on May 20, 2025