The equity markets experienced a highly volatile session on Tuesday, with the benchmark Sensex witnessing a sharp selloff and plummeting 1,235.08 points to close at 75,838.36. This marked the biggest single-day drop in recent months. The broader Nifty 50 index also fell 320.10 points to end at 23,024.65. Investors grappled with concerns over potential global trade disruptions following former US President Trump’s announcement of new tariffs. Additionally, subdued Q3 financial performances from India Inc added to the selling pressure.
The day saw significant swings in the market, with the Nifty opening in a positive zone but then plunging 175 points by around 11:30 a.m. It later spiked to reach a high of 23,410, wiping out losses by noon, only to fall again immediately. The afternoon saw a further decline with many mid and small-cap stocks across sectors facing heavy selling pressure.
The volatility index closed above 17 points for the first time since November 22, 2024, reflecting the uncertainty in the market. The broader indices also witnessed selling pressure, with the Nifty Next 50 falling 2.61% and the Nifty Midcap Select declining by 2.78%. The banking sector was not immune, with the Nifty Bank index dropping 1.58% to 48,570.90.
According to Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, investors fear that Trump’s protectionist stance could harm the economic prospects of many countries, including India. Individual stocks showed mixed performance, with Apollo Hospitals emerging as the top gainer and Trent leading the losses.
The market breadth was negative, with more stocks declining than advancing on the BSE. The session also saw heightened volatility, with stocks hitting upper and lower circuit limits. The FPI pullout further impacted the market sentiment, with Vinod Nair from Geojit Financial Services noting a likely increase in outflows from FIIs.
The gold market reacted positively to global uncertainties, with the precious metal gaining ₹400 on MCX to reach ₹79,000. Technical analysts suggest a cautious outlook, with Shrikant Chouhan recommending level-based trading for day traders. The India VIX surged, indicating potential for larger price swings in the near term.
Looking ahead, market experts suggest a “sell on rise” strategy, citing persistent FII selling and a lackluster start to the earnings season as factors dampening sentiment. The prevailing cautious outlook is further supported by the recent uptick in India VIX.
