Closing Bell: Sensex drops 600 pts from day's high, Nifty slips below 24,600 on first Tuesday expiry

What started as a strong session turned into a sharp reversal, with the Nifty closing below 24,600 after shedding nearly 200 points from the day’s high. Midcaps cooled off but still ended in positive territory, thanks to a broadly upbeat market breadth reflected in a 2:1 advance-decline ratio on the NSE. Gains in FMCG, metals, PSU banks, and realty helped cushion the fall, even as autos, pharma, and IT stocks came under pressure.

We wrap up today's edition of the Moneycontrol live market blog, and will be back tomorrow morning with all the latest updates and alerts. Please visit https://www.moneycontrol.com/markets/global-indices for all the global market action.

The Nifty faced strong rejection at the 21EMA, leading to a sharp intraday fall. The market continues to remain in a sell-on-rise mode until it moves back above 24,850. The daily RSI is in a bearish crossover with a reading below 50. In the short term, the trend is likely to remain weak. On the lower end, support is placed at 24,500, while on the higher end, resistances are placed at 24,700 and 24,850.

Domestic equities reversed early gains from strong macro data, ending lower on profit booking amid caution ahead of the GST Council meeting and F&O expiry, with banking stocks leading the decline. Sugar stocks rallied on relaxed ethanol norms, while export-oriented companies gained following dovish remarks by the US, renewing trade optimism. However, investors remain guarded, with a near-term focus on domestic consumption amid global uncertainty."

The market reversed course after a strong start, with the Nifty slipping below 24,600 and giving up nearly 200 points from the day’s high. While the midcap index pared some gains, it still managed to end in the green. Market breadth stayed positive with an NSE advance-decline ratio of 2:1.

At 15:01 hrs IST, the Sensex was down 199.42 points or 0.25 percent at 80,165.07, and the Nifty was down 46.45 points or 0.19 percent at 24,578.60. About 2271 shares advanced, 1466 shares declined, and 112 shares unchanged.

At 14:05 hrs IST, the Sensex was down 243.51 points or 0.30 percent at 80,120.98, and the Nifty was down 62.95 points or 0.26 percent at 24,562.10. About 2207 shares advanced, 1489 shares declined, and 115 shares unchanged.

At 13:01 hrs IST, the Sensex was up 340.77 points or 0.42 percent at 80,705.26, and the Nifty was up 110.25 points or 0.45 percent at 24,735.30. About 2546 shares advanced, 1131 shares declined, and 94 shares unchanged.

Sugar stocks surged as much as 12 percent after the government removed restrictions on ethanol production from sugarcane juice and sugar syrup. The move is part of India’s broader push to promote ethanol blending in fuel while safeguarding sugar supplies for domestic consumption. Shares of Balrampur Chini, Bajaj Hindusthan, Shree Renuka Sugars and Dhampur Sugar rallied sharply in response.

Reliance Industries Ltd. is poised to gain the most from China’s efforts to curb overcapacity across several industries, alongside its own streamlining initiatives, Morgan Stanley said in a note dated September 1.

Analysts led by Mayank Maheshwari highlighted that billionaire Mukesh Ambani’s conglomerate stands as “the largest beneficiary of China’s anti-involution focus across energy and solar supply chains.”

The brokerage retained its overweight rating on the stock and raised its 12-month price target to Rs 1,701 from Rs 1,602, signaling a potential upside of 26 percent from Monday’s close.

Indian markets opened marginally higher on Tuesday. The Sensex rose 0.18 percent, or 142 points, to 80,500, while the Nifty advanced 0.18 percent, or 40.4 points, to 24,666.95. Among the top gainers, Reliance Industries climbed 1.5 percent, followed by Eternal and Bajaj Finance, which gained 1.1 percent and 0.7 percent, respectively.

Global geopolitics and power equations are changing at a fast and furious pace. India-US relations have deteriorated and normalcy appears difficult in the near future. More actions from the unpredictable US administration are likely. The consequences on the Indian economy and markets cannot be ascertained now. Investors should wait and watch for developments to unfold. Meanwhile, investments can be focused on domestic consumption plays which are on sound footing. There are clear signs of the Indian economy bouncing back as reflected in the Q1 GDP numbers.

Indian rupee fell to 88.33 its lowest till date yesterday but recovered and closed flat due to probable RBI intervention. The opening today is at 88.14 while generally the market looks biddish on the dollar till the closing is below 87.95. RBI is presently the only supplier in the market while we await for IPOs and other big inflows to come in to protect  the rupee from further depreciation and take it higher. For the present dips have to be bought while exporters who have sold may wait for higher levels to further sell or let it stop out below 87.95.

Gold prices hit a record high on continued expectations of a U.S. Federal Reserve rate cut and ongoing weakness in the U.S. dollar. Steady inflows into precious metal ETFs and sustained central bank purchases are helping prevent any significant downward correction, even in the absence of strong immediate catalysts. Notably, central banks now hold more gold than U.S. Treasuries for the first time in three decades, which underscores the continued demand. Unless a major negative event emerges, gold prices are likely to stay elevated.

Oil prices firmed on Tuesday, with Brent up 0.56 per cent at USD 68.53 a barrel and WTI gaining 1.58 per cent to USD 65.02.

#1 Asia markets mostly rise as investors assess SCO summit amid new tariff concerns

#2 GIFT Nifty signals gap up start

#3 US futures trade mixed

#4 U.S. markets were closed for Labor Day holiday

#5 Gold rises; silver hits 14- year high

#6 Oil higher amid worries over rising output

Asia-Pacific markets traded mixed on Tuesday as investors weighed the Shanghai Cooperation Organisation summit and a US court ruling that struck down most Trump-era tariffs. Japan’s Nikkei 225 rose 0.31 per cent, South Korea’s Kospi gained 0.45 per cent and China’s Shanghai Composite inched up 0.04 per cent, while Australia’s S&P/ASX 200 slipped 0.41 per cent.

At Monday close, the Sensex was up 568.09 points or 0.71 percent at 80,377.74, and the Nifty was up 198.25 points or 0.81 percent at 24,625.10. About 2681 shares advanced, 1,320 shares declined, and 173 shares were unchanged.