Broader markets bore the brunt, with the Nifty Midcap 100 and Smallcap 100 plunging 2.27% and 2.5%, respectively. PSU banks dropped nearly 5% after the Supreme Court ruled against JSW Steel’s BPSL resolution plan.
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Equity benchmarks closed lower on Tuesday as investors turned cautious ahead of the US Federal Reserve policy decision and amid rising Indo-Pakistan border tensions. The broader markets witnessed significant selling pressure, with mid and small-caps experiencing sharp declines.
The BSE Sensex ended 155.77 points or 0.19 per cent lower at 80,641.07, while the NSE Nifty 50 declined 81.55 points or 0.33 per cent to 24,379.60. The indices failed to sustain initial gains, with the Nifty falling over 150 points from its intraday high.
“Nifty opened on a marginally positive note, but after initial volatility, the index witnessed selling pressure, remained under pressure throughout the session, and finally settled on a negative note at 24,380,” said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates Ltd.
Market breadth was decidedly negative, with 3,167 stocks declining against just 779 advances on the BSE. The advance-decline ratio stood at 0.25, the lowest since April 25th, according to HDFC Securities. Trading volumes on the NSE cash market saw a marginal increase of 1 per cent compared to the previous day.
The mid- and small-cap segments significantly underperformed the benchmark indices. The Nifty Midcap 100 Index tumbled by 2.27 per cent, while the Nifty Smallcap 100 Index saw a sharp decline of 2.5 per cent. The volatility index, India VIX, rose by 3.58 per cent to 19, indicating heightened market uncertainty.
Among sectoral indices, PSU Banks led the losses, plunging nearly 5 per cent, as the Supreme Court rejected JSW Steel’s 2019 resolution plan for Bhushan Power and Steel (BPSL). “The Supreme Court declared it as illegal and ordered the liquidation of BPSL’s assets. SBI, PNB, Bank of Baroda, Indian Bank, Canara Bank, and IOB were key lenders to BPSL… lenders must return the recovery proceeds and begin provisioning from Q1 FY26,” noted Satish Chandra Aluri from Lemonn Markets Desk.
Other sectoral laggards included Realty, which fell 3.5 per cent, and Pharma, Consumer Durables, Media, Oil & Gas, and Power, which declined between 1 per cent and 2.6 per cent. Auto was the only sector that managed to stay in the green.
Among the top gainers on the NSE were Hero MotoCorp (2.48 per cent), Bharti Airtel (1.61 per cent), Hindustan Unilever (1.41 per cent), Tata Steel (1.37 per cent), and Mahindra & Mahindra (1.22 per cent). The major losers included Adani Enterprises (-4.30 per cent), Jio Financial Services (-3.68 per cent), Eternal (-3.00 per cent), Trent (-2.80 per cent), and SBI Life (-2.53 per cent).
The Indian Rupee weakened by 18 paise against the US dollar to close at 84.43. “Fueled by geopolitical tensions and weakening domestic equities, the dollar inched up against the rupee. Adding to the rupee’s woes were central bank interventions and a soft Chinese yuan,” said Dilip Parmar, Senior Research Analyst at HDFC Securities.
Jateen Trivedi, VP Research Analyst at LKP Securities, added, “Rupee traded weak by 12 paise at 84.35 as crude prices saw a bounce back after entering oversold zones in recent sessions. Weakness in domestic equities, especially a 1.20 per cent drop in the financial index and a 0.35 per cent decline in broader indices, also weighed on the rupee.”
Technically, the Nifty formed a bearish engulfing candle on the daily chart. “On the daily chart, Nifty formed a bearish engulfing candle, indicating weakness. Immediate resistance for Nifty is placed at 24,590, while support is seen near the 200-Day Simple Moving Average (24,050),” noted Yedve.
Looking ahead, market participants are now in a wait-and-watch mode ahead of the US Federal Reserve’s policy decision on Wednesday. “According to the CME FedWatch tool, consensus expectations point to a status quo on rates, although commentary on inflation and future rate trajectory will be key for global risk assets,” stated Bajaj Broking Research.
Nagaraj Shetti from HDFC Securities observed, “The overall chart pattern signal formation of rising wedge type pattern at the highs. Technically, such rising wedge formations after a reasonable upmove shows early signs of reversal pattern on the downside post confirmation.”
Vatsal Bhuva, Technical Analyst at LKP Securities, concluded, “With the Fed outcome now released, a directional move could unfold in the upcoming sessions.”
Published on May 6, 2025