Profit Booking Drags Sensex, Nifty; Global Trade Fears Persist

Indian equity markets registered a decline on Tuesday as profit booking dominated trading activity after a sharp rally in recent sessions.

Market sentiment turned cautious following reports that US President Donald Trump may consider fresh tariffs on Indian rice, adding renewed uncertainty to ongoing trade negotiations between India and the United States.

At closing, the Sensex settled at 84,666.28, down 436.41 points or 0.51%, while the Nifty ended at 25,839.65, falling 120.90 points or 0.47%.

The broader weakness reflected investors’ desire to reassess valuations amid emerging global concerns.

A host of heavyweight stocks dragged the indices lower, with Asian Paints, Tech Mahindra, HCL Tech, Tata Steel, Maruti Suzuki, Sun Pharma, TCS, ICICI Bank, and Bajaj Finance registering notable declines.

These counters slipped up to 4.6% during the session, contributing significantly to the market downturn.

Despite the broad weakness, a select group of stocks, including Eternal, Titan, Adani Ports, BEL, and SBI, held firm in positive territory, offering limited support to the benchmarks.

Mid- and Small-Cap Stocks Outperform

In contrast to the frontline indices, the broader market remained resilient.

The Nifty MidCap index rose 0.32%, while the Nifty SmallCap index gained 1.14%, indicating continued investor appetite for mid- and small-cap segments despite the prevailing caution in blue-chip stocks.

Sectorally, most indices traded in the red. The Nifty IT, Auto, and Pharma indices each declined by nearly 1%, reflecting pressure across key sectors.

Additionally, PSU Bank, FMCG, Media, Consumer Durables, and Chemicals counters remained weak through the day.

Analysts noted that persistent concerns over global trade tensions and profit booking influenced Tuesday’s market trajectory.

Reports of possible US tariffs created fresh apprehension, prompting investors to reduce exposure ahead of further clarity.

Market experts commented that near-term sentiment will depend on central bank signals, currency fluctuations, and foreign institutional investor (FII) activity.

However, India’s robust domestic macroeconomic position is expected to cushion markets from sharper declines.

They added that while investors anticipate a 25-basis-point rate cut by the US Federal Reserve and a potential rate hike by the Bank of Japan, forward guidance for 2026 will play a crucial role in shaping global market expectations.

Meanwhile, the rupee appreciated by 23 paise to 89.82, supported by short covering and a slight rebound in equity markets later in the session.

The session highlighted ongoing fragility in global market sentiment, with investors closely monitoring trade developments and central bank direction as the year-end approaches.

Also Read: Adani Group Unveils $75 Billion Investment Plan To Accelerate India’s Energy Transition