NEW DELHI: India's equity markets witnessed sharp selling pressure on Tuesday, with benchmark indices plunging over 1.5% as investors cashed in on gains following Monday's rally. The Sensex plummeted 1,282 points (1.55%) to close at
81,148, while the Nifty 50 dropped 346 points (1.33%) to 24,578. On Monday, Sensex and Nifty had logged their biggest intraday gains in the last four years amid easing geopolitical tensions between India and Pakistan.
IT stocks bore the brunt of the sell-off on Tuesday, with heavyweights like Infosys, TCS, and HCL Technologies sliding 3-4% on profit booking. Auto and FMCG sectors also saw steep declines, reflecting broader market weakness. However, PSU banking, pharma, and defence stocks bucked the trend, eking out modest gains.
Broader markets displayed a mixed trend. The small-cap index ended in positive territory, while the mid-cap index closed flat.
“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,” said Vinod Nair, Head of Research, Geojit Investments Limited.
He added, “This consolidation is primarily affecting large-cap stocks, while mid- and small-cap segments continue to gain traction. This divergence is expected to persist, supported by broad-based earnings improvements reflected in Q4 results so far. Looking ahead, 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.”
Defence sector stocks witnessed strong
buying on Tuesday after Prime Minister Narendra Modi reiterated the importance of domestic defence production following the recent tussle with Pakistan. Shares of Hindustan Aeronautics, Bharat Dynamics, Bharat Electronics and Garden Reach Shipbuilders jumped between 4% and 7%.
Ashwini Shami, EVP & Sr. Portfolio Manager, OmniScience Capital that the escalated need for defence equipment and systems has come on the fore and the focus has now shifted on the execution of the order books to meet this expected demand. “The great success of Indigenous defence systems such Akash SAM and electronic warfare have shown the reliability and effectiveness and has further strengthened the demand outlook. The need to fortify our borders and enhance our preparedness has established a continuous demand for defence equipments and is hugely positive for the defence companies from a strong growth in their order books and top line,” stated Shami.
He added, “The successful performance of Made in India defence systems against Chinese and other defence systems in Pakistan is also likely to magnify the demand for India-made defence equipment in the long run.”
Ajit Mishra – SVP, Research, Religare Broking said that dip in the Nifty index reflects caution among participants despite easing geopolitical tensions and stable global cues. However, we expect the overall tone to remain positive, given the noticeable support in the 24,400–24,600 zone, added Mishra.