Sensex, Nifty tumble; weak Asian markets weigh on US futures: What's ahead?

Indian equity benchmarks witnessed a sharp decline on Tuesday amid profit booking at higher levels and weak global cues. The 30-share BSE Sensex pack slumped 893.39 points or 1.16 per cent to close at 76,200.68, while the NSE Nifty50 index declined 278.80 points or 1.16 per cent to settle at 23,824.10.

Such was the fall in the domestic indices that around Rs 5.4 lakh crore of BSE market capitalisation (m-cap) was wiped out. Investor wealth, as suggested by the BSE m-cap, fell to Rs 5.46 lakh crore from Rs 475.10 lakh crore compared with a valuation of Rs 480.56 lakh crore recorded in the previous session.

Broader indices also ended in the red, with Nifty Midcap100 sliding 1.05 per cent and Nifty Smallcap100 falling 0.48 per cent.

The selloff was driven by weakness across Asian markets, which also pressured US futures, raising concerns about the durability of the AI-led rally that has supported global equities in recent months.

Ajit Mishra – SVP (Research) at Religare Broking, said, "Markets witnessed profit booking on Tuesday, declining by over a per cent amid a weak global trend. After a flat start, Nifty attempted to inch higher; however, selling pressure emerged following a sharp decline in Asian markets, dragging the index lower as the session progressed. The weakness was largely led by metal and IT stocks, while pharma continued to show relative resilience. Broader markets also witnessed profit-taking."

He added, "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. Meanwhile, the India VIX moved higher toward the 14 mark, while the rupee weakened following the day's market pressure."

Ankur Punj, MD & Business Head at Equirus Wealth, noted, "Markets witnessed a rout due to weak global cues, as the slump in the South Korean benchmark index, coupled with lingering concerns over the lack of progress in the West Asia peace deal, triggered massive selling in IT, banking, metals and telecom stocks. Renewed fears of an upsurge in crude oil prices after the recent fall also prompted investors to prune their equity bets. If inflation ascends due to higher crude oil prices, concerns over a US Fed interest rate hike over the next few months could lead to extended FII fund outflows from India."

Nifty outlook

Rupak De, Senior Technical Analyst at LKP Securities, said, "On the higher end, resistance is placed at 23,950–24,000. On the lower end, crucial intraday support is placed at 23,700, below which serious selling might come."