Indian equity benchmarks traded under pressure on Tuesday, with the Sensex sliding more than 400 points intraday and the Nifty 50 slipping below the 26,200 mark, as investors turned cautious after recent record highs. Heavy selling in frontline stocks such as HDFC Bank and Reliance Industries, coupled with lingering concerns over global trade tensions, dragged sentiment across Dalal Street.
The decline marked a pause in the market’s recent rally, as participants chose to book profits and reassess risks amid mixed global cues and uncertainty around fresh policy developments in the United States.
Markets Retreat After Touching Lifetime Highs
The BSE Sensex was trading lower by over 0.4% in late morning deals, while the NSE Nifty 50 slipped nearly 0.5%, retreating from its all-time peak levels touched earlier this week. Both indices had started the session on a weak note despite positive signals from Asian markets.
On Monday, the Sensex had ended 322 points lower at 85,439.62, while the Nifty closed down 78 points at 26,250.30, failing to sustain gains after scaling record intraday highs. Tuesday’s sell-off extended that weakness as investors digested global developments and sector-specific headwinds.
Market participants said the pullback was largely driven by profit-taking after a sharp run-up, along with renewed worries over potential additional U.S. tariffs that could disrupt global trade flows.
Heavyweights Lead the Decline
Index heavyweights were among the biggest drags on the benchmarks. Shares of HDFC Bank and Reliance Industries fell around 2% each, exerting significant pressure on the Sensex and Nifty.
HDFC Bank extended its recent decline after its Q3 business update failed to excite investors. While the lender reported steady growth in advances, concerns over deposit mobilisation and a tight credit-deposit ratio continued to weigh on sentiment.
Reliance Industries also saw heavy selling amid high volumes, emerging as one of the top contributors to the market’s fall. The stock remained under pressure as oil and gas shares broadly declined, tracking weakness in global crude prices and profit-booking at higher levels.
Other banking and IT stocks also traded lower, with Infosys, HCL Technologies, and TCS slipping amid caution ahead of quarterly earnings and muted global tech sentiment.
Sectoral Snapshot: Oil & Gas, IT Under Pressure
Sectorally, oil and gas stocks witnessed sharp losses. Shares of Hindustan Petroleum, Bharat Petroleum, Indian Oil, and Mahanagar Gas declined between 2% and 4%, reflecting concerns over global energy price volatility and near-term margin pressures.
The IT sector also remained subdued, as traders continued to build bearish positions ahead of third-quarter earnings. Market participants remain cautious about demand outlooks and pricing pressures in overseas markets, especially the U.S. and Europe.
On the other hand, select metal stocks showed resilience, supported by a surge in global commodity prices. Copper prices hit a fresh record above $13,000 per tonne, lending support to non-ferrous metal shares.
Midcaps and Smallcaps Show Mixed Trend
The broader market painted a mixed picture. While some midcap and smallcap stocks managed to attract buying interest, others witnessed sharp corrections following stock-specific news.
Trent shares slumped sharply after its Q3 business update failed to meet Street expectations, despite reporting double-digit revenue growth. Investors appeared concerned about margin trends and valuations after the stock’s strong rally in recent months.
In contrast, Cupid Ltd. rebounded strongly, jumping up to 11% after witnessing a steep decline over the previous two sessions. Traders attributed the bounce-back to bargain hunting at lower levels.
NBCC shares slipped despite announcing a fresh order win, highlighting the market’s selective approach amid heightened volatility.
Banking Stocks: Diverging Trends
The banking space saw mixed action. While large private lenders remained under pressure, some names found support after announcing healthy quarterly updates.
IndusInd Bank shares rose over 2% after the lender reported stable asset quality trends, even as advances declined year-on-year. Kotak Mahindra Bank and L&T Finance also traded higher following positive business updates that reassured investors about growth momentum.
Market experts noted that while credit growth remains strong across the sector, deposit mobilisation continues to be a key challenge—particularly for large banks.
Global Markets Offer Limited Support
Global cues were largely mixed. Asian markets traded mostly higher, with Japan’s Topix and Hong Kong’s Hang Seng posting gains, while Australia’s benchmark index edged lower.
China’s equity markets stood out, with benchmark indices touching their highest levels in over a decade, driven by strong gains in metals and financial stocks. Optimism ahead of the Lunar New Year and a rally in commodity prices lifted investor sentiment in the region.
Meanwhile, U.S. stock futures were largely flat, as markets digested geopolitical developments involving Venezuela and assessed their potential impact on global energy supplies.
Bonds, Rupee, and Commodities
In the bond market, Indian government securities traded in a narrow range as investors positioned themselves ahead of a heavy state debt sale. The benchmark 10-year yield hovered around 6.64%, reflecting cautious sentiment.
The Indian rupee strengthened modestly against the U.S. dollar in early trade, supported by a softer greenback and stable capital flows.
Gold prices edged lower after a recent surge, while oil prices slipped amid expectations of increased supply from Venezuela and subdued global demand forecasts.
Expert View: Time for Caution
Market strategists advised investors to remain cautious in the near term, citing heightened uncertainty on the global front.
Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit Investments, said that while markets have largely looked past geopolitical shocks so far, risks remain elevated.
“We are in a phase of high uncertainty,” he noted. “Investors may consider increasing cash levels while staying invested, so they can take advantage of sudden market corrections.”
He added that the banking sector continues to move into a stronger structural position, supported by rising credit growth, even though deposit challenges persist.
IPO Buzz and Market Outlook
On the primary market front, interest remained strong, with several new-age companies lining up IPOs in 2026. Firms such as PhonePe, Zepto, Oyo, and Boat are expected to tap the markets, aiming to raise nearly ₹50,000 crore collectively.
Analysts believe that while the long-term outlook for Indian equities remains positive, short-term volatility is likely as markets digest earnings, global developments, and valuation concerns.
For now, investors appear content to step back, reassess risks, and wait for clearer signals before making fresh bets.