Dalal Street snapped a four-session rally in trade on Monday, June 30, as investors rushed to take some profits off the table. The 30-pack Sensex index shed around 500 points, while the broader Nifty 50 hovered close to the key 25,500 mark.
At close, the Sensex was down 452.44 points or 0.54 percent at 83,606.46, and the Nifty was down 120.75 points or 0.47 percent at 25,517.05. About 2,288 shares advanced, 1,674 shares declined, and 160 shares unchanged.
The broader markets bucked the trend to gain around 50 basis points each, despite the muted market sentiment seen in the benchmarks.
The sectoral indices traded mixed, with PSU banks emerging as the top gainers. The Nifty PSU Bank index rose 2.7 percent, while Nifty Pharma and Nifty IT added 0.5 percent and 0.5 percent, respectively. Media and Energy indices also traded in the green.
On the other hand, Realty, Auto, and FMCG stocks witnessed selling pressure, with the Nifty Realty index falling 0.9 percent and Nifty Auto slipping 0.6 percent.
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Public sector banking stocks gained sharply after the Finance Ministry directed state-owned lenders to monetise their stakes in subsidiaries via IPOs or strategic stake sales.
In response to the move, shares of leading PSU banks including Bank of Baroda, Canara Bank, Indian Bank, State Bank of India (SBI), Punjab National Bank (PNB), and Bank of India surged between 1 to 3 percent intraday. All 12 constituents of the Nifty PSU Bank index were trading firmly in the green, in stark contrast to the muted movement seen in the broader Bank Nifty index.
"Significant contributors to the rally in India in recent days have been largecaps like HDFC Bank, ICICI Bank, RIL and L&T which have seen accumulation by institutions. Weakness in the dollar index continues to support FII inflows and retail optimism continues to support flows into domestic funds," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.
He added that it makes sense to remain invested in this bull market but making fresh investments at elevated valuations would be risky.
On the technical front, immediate support is now seen at 25,500, followed by 25,200, which was the upper boundary of the recent consolidation and now acts as a strong support zone. On the upside, while bulls aim for the landmark zone of 26,000–26,300, intermediate resistance may be encountered near the 25,800 level, said Sameet Chavan, Head Research, Technical and Derivative - Angel One.
Going ahead, traders are advised to focus on pockets showing sustained momentum and relative outperformance, as leadership is likely to rotate in the coming sessions.
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