Experts said that FIIs are uncomfortable with the valuations of the Indian equity market, even with improving economic indicators.
India VIX, the barometer to assess market anxiety, flared up over 5 percent to reflect heightened market volatility.
The broader market, represented by the Midcap and Smallcap 100 indices, witnessed steeper cuts on July 25.
FIIs sold shares worth Rs 2,134 crore on July 24, while DIIs bought shares worth Rs 2,617 crore, provisional data showed.
Sensex Today | Stock Market LIVE Updates: Nifty Oil & Gas emerged as the biggest sectoral loser, declining 2 percent, followed by Nifty Metal and PSU Bank, which fell 1.7 percent each. Nifty IT slipped 1.4 percent, while Nifty Auto dropped 1.3 percent. Losses of 1 percent were also seen across Nifty FMCG, Private Bank, and Realty indices. On the positive side, Nifty Pharma was the sole gainer, ending the session up 0.5 percent.
On the sectoral front, except PSU Bank (up 1.2 percnet) and pharma (up 0.5 percent), all the other indices ended in the red with IT index down 2 percent, realty and FMCG indices down 1 percent each.
Losses in fast-moving consumer goods and information technology stocks led to the Nifty 50 and Sensex sees losses in trade on July 24.
The pain was even more pronounced in the broader market, with the Midcap and Smallcap 100 indices seeing deeper losses.
Broader markets remained subdued, with the Nifty Midcap 100 slipping 0.33 percent and the Nifty Smallcap 100 edging down 0.14 percent.
Dalal Street closed on a strong note Wednesday, buoyed by optimism around the U.S.-Japan trade deal and fresh cheer from the India-UK free trade pact.
Eternal, Dr Reddy's Labs, Tata Motors, Grasim Industries, Cipla were among major gainers on the Nifty, while losers included Trent, Nestle India, Shriram Finance, Tech Mahindra, Reliance Industries.
Among sectors, realty index slipped 2.6 percent, media index was down 1 percent, FMCG index fell 0.5 percent, while auto, metal, oil & gas, consumer durables, pharma, private bank, PSU Bank, telecom rose 0.5-1 percent.
Gold rate today: Yellow metal's August contracts on the MCX opened at Rs 1,00,453 per 10 grams today.
Dalal Street staged a sharp late-hour rally, driven by optimism over the U.S.-Japan trade deal and the India-UK free-trade agreement.
Given the current market landscape, experts suggested that traders should adopt a cautious 'buy-on-dips' strategy and book partial profits on up-moves.
Auto, IT and Oil & Gas stocks led gains while the broader market opened little changed.
FPIs offloaded Indian equities worth Rs 3,548 crore on July 22, while DIIs stepped in with net purchases of Rs 5,239 crore.
Tata Motors, Shriram Finance, Bharti Airtel, Apollo Hospitals, Bajaj Finance were among top gainers on the Nifty, while losers were Tata Consumer, HUL, Bharat Electronics, UltraTech Cement and Grasim Industries.
More than 140 stocks on the BSE touched their 52-week highs, including Eternal, Gujarat Mineral, Ramco Cements, Dalmia Bharat, Shree Cements, Vishal Mega Mart, JK Lakshmi Cement, UPL, Schneider Electric, Fortis Healthcare, UTI AMC, Aadhar Housing, ICICI Bank, EID Parry, among others.
Gold rate today: Yellow metal's August contracts on the MCX opened at Rs 99,300 per 10 grams today.
The Nifty 50 and Sensex were little changed in the last hour of trade on July 22, while all sectoral indices sank into the red.
Several sectoral indices such as the Nifty Auto, Nifty Realty, and Nifty Pharma indices saw strong selling pressure in the afternoon session on July 22.
Investors and traders will be eyeing a series of factors for further cues, ranging from the ongoing earnings season, trade deal chatter, along with institutional flows.
The frontline indices Nifty 50 and Sensex settled on a strong note in the previous session, breaking their two-day losing streak.
Eternal, HDFC Life, Titan Company, Hindalco Industries, Bharat Electronics were among major gainers on the Nifty, while losers were Shriram Finance, Jio Financial, Eicher Motors, Adani Ports, Tata Motors.
