Sensex settles 800 pts lower from day's high, Nifty ends below 25,900: Four key reasons behind market decline

Sensex, Nifty see profit booking at higher levels. 

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26 Aug, 2025 12:21

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The equity benchmark indices pared significant gains and settled marginally higher for the sixth straight session on Thursday as investors booked profits at higher levels, tracking mixed global cues and a rise in crude oil prices.

After hitting a 52-week high, indices reversed most of their intra-day gains on fag-end profit-taking after sentiment turned cautious amid concerns over US sanctions against Russia's two largest oil companies.

Sensex climbed 130.06 points or 0.15 percent to settle at 84,556.40. During the day, it jumped 863.72 points or 1.02 percent to 85,290.06. The Nifty ended 22.80 points or 0.09 percent higher at 25,891.40.

ETERNAL, InterGlobe Aviation, Eicher Motors, Bharti Airtel and UltraTech Cement were among major laggards, declining up to 3 percent intraday.

1) Profit booking at higher levels: After hitting fresh record highs earlier in the session, investors turned to profit booking, leading to a pullback in key indices. However, markets are still on track for gains to extend to six days.

Bank Nifty fell by over 400 points to trade at 58,161 after hitting all-time high of 58,577 earlier today.

"Domestic equities started on a positive note; however, they pared early gains as investors booked profits following sanctions on Russian oil and the possible postponement of India–US trade negotiations.

"Meanwhile, IT stocks advanced as sentiment improved after Trump’s softer tone on H1B visas...As the undercurrent vibes of the domestic market have improved due to a possible India-US deal and a rise in consumer demand, the broad market is expected to do much better henceforth," Vinod Nair, Head of Research, Geojit Investments Limited, said.

2) Crude oil prices rebound: Brent crude, the global oil benchmark, rose 2.56 percent to USD 64.19 a barrel. The uptick in oil prices weighed on investor sentiment.

3) Mixed global cues: Global equities offered little support, with most Asian markets trading lower. Japan’s Nikkei 225, Shanghai’s SSE Composite, and Hong Kong’s Hang Seng indices were in the red. Overnight, US markets closed in negative territory, adding to the cautious tone in domestic trade.

4) India VIX rises: India VIX, the volatility gauge, was 3.3% higher at 11.73 at 2:45 pm on October 23. A higher VIX suggests short-term uncertainty among market traders.

Puneet Singhania Director at Master Trust Group

On the downside, the 25,400-25,500 zone remains critical support, providing a strong base for sustained upward movement amid positive market sentiment and healthy inflows.