Mumbai, May 13—Indian equity benchmark indices witnessed a sharp decline in early trade on Tuesday, retreating from the previous session’s historic rally. Investors booked profits, and global cues presented a mixed picture.
Benchmark Indices Open Lower
The BSE Sensex plunged by 497.50 points to open at 81,932.40, while the NSE Nifty fell 117.20 points to 24,807.50. Losses deepened as trading progressed, with the Sensex further dropping 788.62 points to 81,641.28, and the Nifty slipping 209.90 points to 24,714.80.Major Drags and Gainers
Several heavyweight stocks weighed on the indices. Infosys, Power Grid, Kotak Mahindra Bank, ICICI Bank, HCL Tech, TCS, and Nestle were among the top laggards on the Sensex.On the other hand, Sun Pharma, IndusInd Bank, Bajaj Finance, and Tata Steel were trading in the green, providing some cushion to the overall market.
Global Market Trends
Asian markets presented a mixed trend. Indices in South Korea, Japan, and China were trading higher, while Hong Kong’s Hang Seng index edged lower. Meanwhile, US markets had closed significantly higher on Monday, with the Nasdaq surging 4.35%, the S&P 500 rising 3.26%, and the Dow Jones Industrial Average gaining 2.81%.Short-Covering and Retail Buying Fueled Monday's Surge
According to VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, Monday’s rally was primarily driven by short-covering and retail/HNI buying, rather than institutional flows. "The combined FII and DII net purchases were only Rs 2,694 crore," he noted.He also highlighted the significance of the 90-day tariff reduction agreement between the US and China, calling it a potential signal towards the end of their trade war — a positive development for the global economy.
Market Outlook and Oil Prices
While benchmark indices marked their biggest single-day gains in absolute terms on Monday, Tuesday's pullback indicates a natural round of profit-taking.Crude oil prices showed slight weakness, with Brent crude falling 0.23% to USD 64.81 per barrel.
Institutional Activity
According to exchange data, foreign institutional investors (FIIs) purchased Rs 1,246.48 crore worth of equities on Monday, continuing their buying spree after a brief pause.On Monday, the Sensex jumped 2,975.43 points, or 3.74%, to close at 82,429.90, while the Nifty soared 916.70 points, or 3.82%, to end at 24,924.70. This was driven by geopolitical de-escalation between India and Pakistan and global trade optimism.
