Selloff intensifies! Sensex tumbles over 1,100 pts, Nifty below 24,650; pharma, defence stocks gain

IT sees profit booking, while defence and pharma rally.

Benchmark indices Sensex and Nifty extended selloff during the afternoon session on May 13, as the broader market continued to show resilience. Three days into the ceasefire between India and Pakistan, India VIX saw a mild uptick during intra-day trading, indicating that investors are still relatively calm despite weak overall sentiment.

Around noon, the Sensex was down 1,156.69 points or 1.40 percent at 81,273.21, and the Nifty was down 295.10 points or 1.18 percent at 24,629.60. About 2253 shares advanced, 1205 shares declined, and 101 shares unchanged.

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Among sectors, the Nifty Pharma index was the top performer, as investors expect US President Donald Trump’s executive order to have little effect on the US generics market. Shares of Dr. Reddy’s rose around 4 percent, while Granules, Glenmark, Lupin, Divi’s Lab, and Aurobindo Pharma traded about 3 percent higher.

In this weak market, defence-related stocks also attracted buying interest. Shares of Hindustan Aeronautics, Bharat Dynamics, Bharat Electronics, and Garden Reach Shipbuilders rose between 4 to 7 percent. The rally came after Prime Minister Narendra Modi emphasized the need for “Made In India” defence equipment, following the temporary halt in India-Pakistan military activity.

On the contrary, Nifty IT index saw profit-booking after yesterday's big rally, with shares of Infosys, HCL Tech, and TCS declining between 1-3 percent in intra-day deals.

Looking ahead, Aishvarya Dadheech, founder and CIO of Fident Asset Management, said the market is showing signs of a risk-on sentiment as tariff uncertainty is now out of the way and there is peace on the cross-border front.

“We believe the risk of a US recession is lower, but this is just a 90-day truce. Domestically, the ceasefire tensions have not completely eased, and any flare-up could trigger market volatility. That said, earnings growth of 5 percent in large-caps and 8 to 9 percent in small- and mid-caps shows that fears of a sharp slowdown are fading. Fundamentally, India is in a better place now compared to one or two quarters ago,” Dadheech told Moneycontrol.

On the technical side, analysts at ICICI Securities said the breakout from a three-week consolidation confirms a resumption of the uptrend. They have revised the support base to 24,400, which is the 50 percent retracement level of the recent rally from 21,743 to 24,944.