Sensex drops over 300 pts from day's high, Nifty below 25,900: 3 key reasons behind market trimming gains

Stock market today news: Sensex, Nifty see profit booking.

The equity benchmark indices Sensex and Nifty pared early gains on Tuesday amid profit booking at higher levels and resistance around the 26,000-mark on the Nifty.

The Sensex climbed 417.2 points, or 0.49 percent, to hit an intraday high of 84,482.95 in early trade. However, selling pressure emerged in the second half of the session, pulling the index down by over 300 points from the day’s peak. At around 2:15 pm, the Sensex was trading at 84,175.87, up 110.12 points or 0.13 percent.

The broader Nifty, which moved close to the 26,000 level to touch an intraday high of 25,989.45, also trimmed gains. The index was trading at 25,895.65, up 28.35 points or 0.11 percent.

3 key reasons behind markets trimming gains

1) Profit booking after three-day rally: The investors booked profits in select FMCG, pharma and PSU bank stocks after the benchmarks extended their gains for the third straight session. Early gains were supported by firm trends in Asian markets and continued foreign institutional investor (FII) inflows.

2) Rupee weakens: The rupee depreciated 11 paise to 90.77 against the US dollar on Tuesday, reflecting cautious sentiment in the currency market following the India-US interim trade framework. The domestic unit opened at 90.63 at the interbank foreign exchange market and slipped to an intraday low of 90.77. On Monday, the rupee ended marginally lower at 90.66 against the US dollar.

3) Technical resistance near 26,000: Aakash Shah, Technical Research Analyst at Choice Equity Broking Private Limited, said the Nifty has strengthened after reclaiming key moving averages and sustaining above the 25,700–25,800 zone. "The immediate upside resistance is placed near 26,000, followed by 26,100. A decisive breakout above 26,000 could trigger further short-covering and extend the ongoing recovery. On the downside, 25,700 remains an important support, followed by 25,500. The overall structure remains positive," Shah said.

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