Sensex tumbles 800 pts, Nifty below 24,800, dragged by IT, financials; India VIX rises 5%

Grasim, UltraTech Cement, NTPC, M&M, and Axis Bank were among the top losers.

Benchmark indices Nifty and Sensex started Tuesday’s session on a weak note, pausing after two straight days of gains that hinted at a recovery in sentiment. Early trade saw bearish cues, with sectors like banks and IT denting sentiment on the bourses.

At about 10:30 am, the Sensex was down 844.55 points or 1.03 percent at 81,331.90, and the Nifty was down 237.85 points or 0.95 percent at 24,763.30. About 1379 shares advanced, 1798 shares declined, and 144 shares unchanged.

In the previous session, the frontline indices surged as much as 400 points buoyed by gains in auto, IT, and metal stocks. However, profit-booking emerged at higher levels after the Sensex surged nearly 600 points intraday.

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"Since mutual funds are sitting on sizeable cash, any dip will be bought into, and high valuations will trigger selling on rallies. A sustained rally will happen only when leading indicators suggest a revival in earnings growth. That is some time away," V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said. "An important trend in the market now is the slow accumulation in rate-sensitive sectors like autos in anticipation of more rate cuts, which are almost sure to happen since inflation is trending down," he added.

Sectoral indices were largely in the red on Tuesday, with the Nifty Bank slipping 0.76 percent and Nifty IT shedding 0.86 percent. Nifty Auto, FMCG, Energy, and Infra indices also saw cuts ranging between 0.7 and 0.8 percent. Among the few gainers, Nifty Realty rose 0.29 percent, and Nifty Pharma was little changed. Volatility edged higher, with the India VIX climbing 5.5 percent to 19.

Also read: IndiGo Block Deal: Co-founder Rakesh Gangwal sells 5.8% stake worth Rs 11,928 crore

The broader market was more resilient, with the Nifty Midcap 100 down just 0.3 percent and the Nifty Smallcap 100 inching up 0.07 percent.

Interglobe Aviation, the operator of IndiGo Airlines, lost over 3 percent after co-founder Rakesh Gangwal offloaded up to 3.4 percent of his stake through a block deal that could fetch as much as Rs 6,831 crore, CNBC TV-18 reported, citing people familiar with the matter. The deal marks another step in Gangwal’s ongoing effort to gradually exit the airline’s holding company.

EV bus manufacturer Olectra Greentech slipped as much as 14 percent after Maharashtra’s Transport Minister Pratap Sarnaik called for the cancellation of the company’s electric bus order over missed delivery deadlines. In a post on social media platform X, Sarnaik said that the company had failed to deliver even a single bus from the 1,000 units scheduled for handover by May 22.

Read more: Olectra Greentech tanks 14% as Maharashtra govt cancels Rs 10,000-crore e-bus order

"Technically, Nifty formed a bullish candle on the daily chart, indicating strength. However, the index is still placed near the psychological resistance level of 25,000. A sustainable move above 25,000 could drive the Nifty towards 25,200–25,250 levels in the short term. On the downside, 21-Day Exponential Moving Average (21-DEMA) support is placed near 24,530. As long as the index holds above this level, a buy-on-dips strategy should be adopted," said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment.

"The Bank Nifty index holds firmly above all key moving averages, indicating short-term support remains intact. The 20-day simple moving average, currently at 54,980, may act as immediate support in case of any minor pullback. The RSI is now at 60, momentum appears to be building, though there's still headroom before overbought levels are tested. MACD continues to hover in negative territory, but the narrowing gap between the fast and slow lines points to a potential shift in momentum. A sustained close above 55,700 could push the index higher, with scope to retest the all-time high near 56,100," Samco Securities said.

Top gainers on the Nifty included Bharat Electronics, Dr Reddy’s Labs, Cipla, IndusInd Bank, and Sun Pharma, while Grasim, UltraTech Cement, NTPC, M&M, and Axis Bank were among the top losers.

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