Markets fall for 3rd day: Sensex tumbles nearly 900 pts, Nifty below 24,700 as auto, bank stocks see heavy selling

Laggards on the index included Eternal (Zomato), Hero MotoCorp, Bajaj Auto, Shriram Finance and Maruti Suzuki.

Markets kicked off the week on a sour note, with the Nifty and Sensex extending their losing streak to a third straight session on Tuesday. A sea of red swept across all 13 sectoral indices, led by sharp cuts in auto, banking, and FMCG stocks. The broader market, too, lost steam, snapping a six-day winning run and reflecting the depth of the selloff.

At close, Sensex was down 872.98 points or 1.06 percent at 81,186.44, and the Nifty was down 261.55 points or 1.05 percent at 24,683.90. About 1398 shares advanced, 2415 shares declined, and 127 shares remained unchanged.

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"The recent weakness in the equity markets is largely a result of profit booking after a strong, one-way rally over the past few trading sessions. The technical indicators had moved into overbought territory, prompting a healthy pullback," Ruchit Jain, Vice President of Technical Research at Motilal Oswal, said. He added that this correction is not a sign of concern from a broader trend perspective and expects this pullback to continue towards the 24,600–24,500 zone on the Nifty, a key support area. This remains a "buy on dips" market, and investors can use any decline towards this level as a good buying opportunity.

The broader market, represented by the Nitfy Midcap and Smallcap 100 slipped 1.62 and 0.9 percent in today's session. Jain said the midcap segment continues to show strength and is forming a higher high and higher low pattern, which indicates sustained buying interest. Market breadth has also remained positive in recent days, further reinforcing the strength in broader markets. It is advisable to be cautious with small-cap stocks with stretched valuations.

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On a weak trading day, all NSE sectoral indices were in the red. The Nifty Auto index was among the worst performers, falling 2.2 percent, snapping a four-day ageing streak. Meanwhile, Nifty FMCG and Nifty Pharma declined 1.01 percent and 0.92 percent, respectively. The Nifty Bank index slipped 0.98 percent, with losses seen in both private and PSU banking stocks. Other notable laggards included Nifty Realty (0.72 percent) and Nifty Infra (0.77 percent).

Amber Enterprises shares gained 3 percent after reporting its earnings show for the January-March FY25 period. The company reported a 34 percent year-on-year increase in consolidated revenue from operations, rising from Rs 2,805.46 crore in Q4FY2024 to Rs 3,753.70 crore for the March quarter. The firm's consolidated net profit for the quarter grew 23 percent year-on-year to Rs 116 crore. The firm has improved its market share further (100 bps to 27 percent) in room air-conditioners (RAC) in FY25 and now guides for 10–12 percentage points outperformance to industry in FY26.

Defence major BEL gained 1 percent, continuing its excellent run in the recent session, after the management shared a confident order inflow picture on May 20, and said it expects Rs 30,000 crore worth of orders for Quick Reaction Surface to Air Missiles (QRSAM) by March or April next year. Out of the recently approved emergency procurement proposal for the armed forces after Operation Sindoor, BEL is confident of securing 8-10 orders, and would have more visibility on these in a week.

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In the near term, the market is likely to move to a consolidation phase. The high valuations will put a cap on the upside, with institutional selling emerging on the upside. This was evident from the institutional activity yesterday when both FIIs and DIIs emerged sellers, though marginally, V K Vijayakumar of Geojit Investments Limited said.

Coal India, ONGC, Hindalco, Tata Steel, and Dr Reddy's were the top gainers on the Nifty. Laggards on the index included Eternal (Zomato), Hero MotoCorp, Bajaj Auto, Shriram Finance and Maruti Suzuki.

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