Markets see profit booking after Monday’s rally

Bengaluru: Indian markets fell on Tuesday as investors booked profits after Monday’s stupendous rally, with most of the selloff seen in IT, automotive and banking stocks.

The benchmark BSE Sensex closed down 1,282 points or 1.55 per cent to settle at 81,148.22 with 25 of its constituents closing with losses and five with gains. During the day’s session, it had fallen sharply by 1.68 per cent. The broader 50-share NSE Nifty dropped 346.35 points or 1.39 per cent to 24,578.35.

“The domestic market witnessed profit booking, following Monday’s sharp rally. The relief-driven surge—fuelled by easing global and domestic risks, including a reduction in trade war tensions and Indo-Pak geopolitical stress—appears to be taking a breather. This consolidation is primarily affecting large-cap stocks, while mid- and small-cap segments continue to gain traction,” said Vinod Nair, Head of Research, Geojit Investments Limited.

“Profit-taking was evident across the board, with IT, FMCG, and auto sectors emerging as the top losers. In contrast, stocks from PSU banking, pharma, and the defense space managed to edge higher. The broader markets showed a mixed trend, with the small-cap index ending in the green, while the mid-cap index closed nearly unchanged,” said Ajit Mishra, SVP Research, Religare Broking Ltd.

On Monday, the Sensex and Nifty had posted their single-biggest day rise in absolute terms, and best day in four years in percentage terms, as investors cheered the ceasefire between India and Pakistan, as well as the reduction of tariffs between the United States and China.

BSE SENSEX. PTI GRAPHICS.

From the Sensex firms, Infosys declined the most on Tuesday (3.54 per cent), followed by Power Grid, Eternal, HCLTech, Tata Consultancy Services and Bharti Airtel. IndusInd Bank, HDFC Bank, ICICI Bank, NTPC, Maruti, Tata Motors, and M&M were also among the laggards. Sun Pharma, Adani Ports, Bajaj Finance, State Bank of India and Tech Mahindra were the gainers.

Broader markets closed with gains on Tuesday with the BSE smallcap gauge jumping 0.99 per cent and midcap index by 0.17 per cent.

NSE NIFTY. PTI GRAPHICS.

In Asian markets, South Korea’s Kospi, Japan’s Nikkei 225 index and Shanghai’s SSE Composite index settled in the positive territory while Hong Kong’s Hang Seng ended lower. European markets were trading mostly higher. US markets ended significantly higher on Monday following easing of trade tensions between China and the US.

Looking ahead, Geojit’s Nair said that there is increasing optimism around FY26 earnings growth, underpinned by supportive fiscal and monetary policies, a rebound in external demand, a favorable monsoon outlook, and declining inflation and interest rates. “These factors collectively suggest that midcaps are well-positioned to catch up and potentially outperform in the coming quarters,” he said.