D-St rout extends as Sensex falls 700 pts intraday; here's what happened

Indian benchmarks extended their decline for a second straight session on Tuesday, weighed down by weak global cues and the absence of fresh domestic catalysts.

 

On Tuesday, the Nifty index fell as much as 0.89 per cent, or 230 points, to 25,728, while the 30-stock Sensex tumbled 0.84 per cent, or 714 points, to 84,382.9. 

 

The Nifty and Sensex have fallen 1.5 per cent over the past two sessions, eroding the early-month optimism that had lifted investor sentiment. From the record levels on December 1 this year, the Nifty is down 2.3 per cent. 

 

During the session, the market breadth remained weak on the BSE. Out of 3,695 stocks traded on the BSE, only 1,008 advanced versus 2,526 declines, underscoring broad-based selling beneath the index level. 

 

On the sectoral front, all indices were in the red, with Nifty IT and Media down nearly 1.5 per cent. Nifty Auto, Chemicals and Metals were also among the top losers on Tuesday. 

 

In the broader market, the Nifty Midcap 100 and Nifty Smallcap 100 indices fell 1.5 per cent, each. The small-cap index has fallen 3.3 per cent since Monday.

 

Indian equity markets came under pressure today, with broad-based selling triggered by weak global cues and rising caution ahead of key US inflation and interest-rate signals, according to Ponmudi R, chief executive officer of Enrich Money. "Profit-booking after the recent rally is evident across frontline stocks, while IT and banking counters are witnessing mild unwinding as investors turn defensive."

Why are Indian stock markets falling?

Additional tariffs on Indian rice

US President Donald Trump indicated that he may impose new tariffs on agricultural imports, particularly Indian rice and Canadian fertilisers, as trade discussions with the two countries progress slowly.

 

Trump made these remarks at a White House meeting on Monday after he unveiled $12 billion support package for American farmers, adding that the imports were posing a challenge for domestic producers and reiterated his intent to address this issue.

 

Fresh comments from Trump threatening additional tariffs on rice imports from India, amid slow progress in the ongoing trade negotiations, further dampened domestic sentiment, Ponmudi said. "The renewed tariff overhang added to investor caution, reinforcing the broader risk-off tone in the market."  CATCH STOCK MARKET LIVE UPDATES TODAY

Asian markets tumble on Fed jitters

Most equity markets in Asia traded with losses on Tuesday, signalling caution ahead of the Federal Reserve's rate decision. The MSCI AC Asia Pacific index was down 0.3 per cent, led by losses in the Kospi and Hang Seng indices.

 

Overnight, Wall Street ended lower with traders expecting a 25 basis-point rate cut on Wednesday, according to Bloomberg. It added that some traders have warned that the US central bank may signal a slower pace of easing ahead, causing some jittering among investors. The S&P 500 and the Nasdaq indices were down 0.35 per cent and 0.14 per cent, respectively.

Other negative factors

Elevated US bond yields, the Indian rupee slipping past 90 amid persistent dollar strength, and continued FII outflows are weighing heavily on risk appetite, analysts said. 

 

The Indian rupee opened flat near the 90.12 mark, but pared losses to trade at 89.94 per dollar as of 10:30 AM. Meanwhile, on Monday, FIIs sold ₹655.59 crore, remaining net sellers in every session this month.

Technical view

Immediate resistance is now placed at 25,950, 26,000, and only a sustained breakout above this zone can revive upside momentum toward 26,200-26,350, analysts said. On the downside, a second decisive break below 25,800 could accelerate the corrective phase toward the 25,700-25,600 zone.