Benchmark equity indices declined up to 1.16% on Tuesday, hit by weak global cues and heavy selling in metal and IT stocks.
The Sensex posted its worst single-day performance of the month, falling 893.39 points, or 1.16%, to close at 76,200.68. The Nifty declined 278.80 points, or 1.16%, to settle at 23,824.10. The India VIX surged 8.56% to 13.40, signalling heightened market volatility.
Investors’ wealth eroded by ₹5.50 lakh crore as the total market capitalisation of BSE-listed companies fell to ₹475.09 lakh crore.
Analysts attributed the decline to weakness in IT stocks, concerns over slowing private sector activity, and a weak monsoon outlook. The HSBC Flash India Composite PMI Output Index fell to 57.4 in June from 59.3 in May, indicating the slowest pace of expansion since March, as demand for goods and services softened and job additions moderated.
“Private sector activity eased a bit in June. Growth of manufacturing output softened a tad as inventory-building lost steam after a few hectic months,” said Pranjul Bhandari, chief India economist at HSBC in a report.
“The decline was largely influenced by weakness across Asian markets, which also weighed on US futures amid concerns over the sustainability of the AI-driven rally, dampening overall market sentiment,” said Ajit Mishra, SVP–Research, Religare Broking.
Asian markets witnessed broad-based declines, with South Korea’s Kospi emerging as the worst performer, plunging 10%. Japan’s Nikkei fell 3.55%, followed by Thailand (down 2.11%), Hong Kong (down 1.82%) and China (down 1.37%).
“Market sentiment weakened as early gains proved unsustainable amid negative global cues and prevailing caution. Profit booking after the recent rally further intensified downside pressure, resulting in broad-based weakness across key sectors,” said Vinod Nair, Head of Research, Geojit Investments.
Stable crude oil prices and easing geopolitical tensions offered some support, but investors remained cautious on monsoon progress and ongoing US-India trade negotiations, Nair added.
Market breadth remained negative, with 2,790 stocks declining against 1,500 advancing on the BSE. The BSE MidCap and SmallCap indices fell 0.89% and 0.73%, respectively.
Metals, IT, PSU banks, consumer durables and realty stocks were among the worst performers, declining up to 3.22%. Pharma and healthcare were the only sectors to end in positive territory, gaining up to 0.92%.
“IT stocks remained under pressure, with the Nifty IT index declining after brokerages including Jefferies and Morgan Stanley flagged softer demand trends following a weaker-than-expected outlook from Accenture,” said Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services.
“Metal stocks also witnessed sharp selling, with the Nifty Metal index falling nearly 3% as global metal prices retreated after the previous session’s gains,” Khemka added.
Foreign portfolio investors (FPIs) bought shares worth ₹17.86 crore, while domestic institutional investors (DIIs) purchased shares worth ₹680.21 crore, according to provisional BSE data.
