Mumbai: Equity benchmark indices Sensex and Nifty witnessed a significant drop in early trade on Tuesday, following a sharp rally in the previous session. The decline is attributed to profit-booking by investors looking to capitalise on recent gains. The 30-share BSE Sensex plunged 497.5 points, opening at 81,932.40. Similarly, the NSE Nifty dropped by 117.2 points to 24,807.50. Analysts suggest that after the recent surge, markets were due for a correction, especially with global cues remaining mixed and investors adopting a cautious approach.
On Monday, both indices had closed at record highs, fueled by strong corporate earnings and increased domestic institutional investment. However, early trade on Tuesday reflected a more restrained mood, with several sectoral indices showing red. Meanwhile, broader global factors such as inflation concerns, fluctuating crude prices, and signals from the U.S. Federal Reserve have added to the market volatility. Experts also point to upcoming macroeconomic data releases, which could further influence market trends.
Despite the dip, market sentiment remains moderately positive in the long term, with expectations of economic growth and policy support continuing to bolster confidence. However, traders are advised to stay cautious in the short term, keeping an eye on both domestic developments and international market trends. The session highlights the dynamic nature of the stock market, where quick rallies are often followed by strategic profit-taking.