Market snaps 2-day rally: Sensex tumbles 625 pts, Nifty below 24,850 as IT, FMCG, auto stocks drag

Laggards on the index included UltraTech Cement, ITC, JSW Steel, Tata Motors, and Axis Bank.

Markets rode a rollercoaster on May 27, with the Sensex swinging nearly 1,300 points in a dramatic session that saw bulls and bears battle for control. Heavy selling in auto, IT, and FMCG stocks dragged the Nifty and Sensex off their two-day winning streak. Yet, amid the chaos, the broader market held its nerve, ending marginally higher through a choppy session and offering a sliver of stability in an otherwise volatile day.

At close, the Sensex was down 624.82 points or 0.76 percent at 81,551.63, and the Nifty was down 174.95 points or 0.70 percent at 24,826.20. About 1893 shares advanced, 1898 shares declined, and 137 shares remained unchanged.

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Experts say that any dip will be bought into, and high valuations will trigger selling on rallies. A sustained rally will happen only when leading indicators suggest a revival in earnings growth. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said that an important trend in the market now is the slow accumulation in rate-sensitive sectors like autos in anticipation of more rate cuts, which are almost sure to happen since inflation is trending down.

Sectoral indices on the NSE largely traded in the red on May 27, with the Nifty FMCG, IT, and Auto indices leading the decline, falling over 1 percent each. Banks and financials also struggled, with both Nifty Bank and Private Bank indices down around 0.7 percent. Defensive pockets like pharma and energy witnessed mild declines, while PSU Bank, Realty, and Media indices managed to eke out marginal gains. Meanwhile, India VIX spiked 5.55 percent, indicating a rise in market volatility.

The broader market saw relative gains, as the Nifty Midcap 100 and Smallcap 100 ended 0.15 percent and 0.1 percent higher, respectively.

Jio Financial Services gained as much as 3.5 percent after JioBlackRock Asset Management Private Limited, a 50:50 joint venture between Jio Financial Services Limited (JFSL) and BlackRock, on May 27 said it has received regulatory approval from the Securities and Exchange Board of India (SEBI) to commence operations as an investment manager for their mutual fund business in India.

Shares of Mazagon Dock and Garden Reach Shipbuilders & Engineers (GRSE) gained up to 4 percent on May 27 after a report said orders to the tune of Rs 44,000 crore could soon be placed for the Navy. Citing defence ministry sources, Times of India reported on May 26 that the procurement case for 12 advanced minesweepers or mine countermeasure vessels (MCMVs) for the Navy, at an estimated cost of around Rs 44,000 crore, will soon be placed.

Interglobe Aviation, the operator of IndiGo Airlines, lost over 2 percent after co-founder Rakesh Gangwal offloaded up to 3.4 percent of his stake through a block deal that could fetch as much as Rs 6,831 crore, CNBC TV-18 reported, citing people familiar with the matter. The deal marks another step in Gangwal’s ongoing effort to gradually exit the airline’s holding company.

Brainbees Solutions, the parent organisation of FirstCry, dropped nearly 6 percent after the company reported a net loss of Rs 111.5 crore for the fourth quarter of FY25. Notably, the company's Rs 111.5 crore net loss marked a significant increase from the Rs 43.2 crore net loss reported in the same period of the previous financial year. Sequentially, the net loss witnessed a more pronounced rise from the Rs 14.7 crore reported in Q3 FY25.

"The Nifty managed to close above the psychological 25,000 level yesterday, but as long as the previous high of 25,116 is holding, there is a small chance of a dip that holds 24,462. This level is a make-or-break for bulls and bears alike, and the preferred view is that as long as it is intact, we will target the 25,400 - 25,600 area," Akshay Chinchalkar, Head of Research at Axis Securities, said. "This dip doesn't have to come, however, in which case the 25,500 area becomes the immediate play. Elsewhere, in yet another sign of bullish behaviour, the NSE smallcap index ended above its 200-day moving average yesterday for the first time in seven months. Macro-wise, expectations of a US-EU trade deal are keeping sentiment positive," he added.

Jio Financial Services, IndusInd Bank, Sun Pharma, Trent, and Adani Ports were the top gainers on the Nifty. Laggards on the index included UltraTech Cement, ITC, JSW Steel, Tata Motors, and Axis Bank.