Market Recap: Sharp Sell-Off Grips Dalal Street
Indian equity markets witnessed a sharp decline on Tuesday, with benchmark indices closing deep in the red amid rising global uncertainty and renewed trade tensions. The Sensex plunged 849 points to settle at 80,787, while the Nifty 50 dropped 256 points, ending the session at 24,712.
Volatility spiked notably, with the India VIX—a measure of market fear—rising by 4%, signaling heightened nervousness among traders ahead of monthly expiry and potential geopolitical triggers.
Key Drivers Behind the Fall
- U.S. Tariff Threats The United States issued a draft notice proposing tariffs of up to 50% on Indian goods, effective from 27 August, sparking fears of a trade standoff and weakening export sentiment.
- Weak Global Cues Asian markets closed lower, with Hang Seng, Nikkei, and Shanghai Composite all in the red. European indices also slipped amid political uncertainty in France and cautious Fed commentary.
- FII Selling Pressure Foreign Institutional Investors (FIIs) offloaded stocks worth ₹2,466 crore, continuing their selling streak. Domestic Institutional Investors (DIIs) attempted to cushion the fall but couldn’t offset the pressure.
- Rupee Weakness The Indian rupee depreciated by 22 paise, closing at ₹87.78/USD, driven by dollar demand from importers and uncertainty around trade flows.
- Broad-Based Sectoral Decline Except for FMCG, all major sectors ended in the red. Realty, Pharma, PSU Banks, and Metals saw the steepest declines, with some stocks falling over 4%.
Sector & Stock Highlights
- Realty Index fell over 2.5%, led by losses in DLF and Oberoi Realty
- Pharma stocks declined after U.S. drug pricing reforms; Sun Pharma and Dr. Reddy’s dropped over 3%
- PSU Banks saw heavy selling; Bank of India and Canara Bank fell over 4%
- Vodafone Idea plunged nearly 10% after the government ruled out AGR relief
- FMCG stocks bucked the trend, with Britannia and HUL gaining on GST cut expectations
Technical View
The Nifty closed below its key support level of 24,750, indicating potential weakness ahead of expiry. Analysts expect further consolidation between 24,600–24,900, with resistance now seen near 25,050. India VIX’s rise suggests caution, and traders are advised to manage positions tightly.
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Closing Note
Tuesday’s sharp fall is a reminder that global headlines and institutional flows can reshape market direction in hours. For traders and investors, staying informed and managing risk is no longer optional—it’s essential.
Eqwires Research Analyst will continue to track market developments and provide timely updates through its daily coverage and advisory desk.
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