Dalal Street Turns Bearish as Banks, IT Drag; Nifty Slips Below 24,500

Dalal Street turned bearish on Tuesday afternoon as profit booking erased the early gains. Around 2 pm, the Sensex was trading at 78,317.33, down 321.70 points or 0.40 per cent, while the Nifty 50 slipped 310.85 points or 1.25 per cent to 24,463.45. The sharper fall in the Nifty also came after Monday's unusual closing-auction spike, which had pushed the index sharply higher in the final minutes of trade.

The broader market presented a mixed picture. Nifty Bank fell 1.42 per cent to 57,420.25, becoming one of the biggest drags on the market. The Nifty Midcap 100 declined 0.51 per cent to 63,355.95, while the Nifty Smallcap 100 bucked the trend, gaining 0.38 per cent to 19,663.45. India VIX jumped over 4 per cent to around 12.42, reflecting a rise in near-term volatility expectations.

Sectorally, selling was concentrated in rate-sensitive and heavyweight pockets. Nifty Financial Services dropped around 1.31 per cent, Nifty Realty fell about 1.19 per cent and Nifty IT declined around 1.10 per cent. Banking stocks faced broad-based selling, while IT counters witnessed profit booking after their strong run in the previous session. On the positive side, Nifty Media gained around 1.06 per cent and Nifty Metal advanced about 0.47 per cent, showing relative strength despite weak headline indices.

Stock-specific action remained lively. Ather Energy surged nearly 14.7 per cent to around Rs 1,459, extending its rally after Q1 FY27 revenue jumped 89 per cent to Rs 1,217 crore and its net loss narrowed to Rs 51 crore from Rs 178 crore. KEI Industries gained over 7 per cent after quarterly profit rose 40 per cent and revenue increased 23 per cent. BASF India jumped more than 12 per cent following a 162 per cent rise in quarterly profit. On the other hand, LIC dropped around 9 per cent after the government's offer for sale opened at roughly an 11 per cent discount to the previous market price.

In the latest available session on August 3, FIIs were net buyers of Rs 922.26 crore, while DIIs bought equities worth a net Rs 1,571.18 crore.

Global cues were supportive but failed to lift domestic sentiment. Overnight, the S&P 500 gained 1.5 per cent, Nasdaq rose 2.1 per cent and Dow Jones advanced 1.3 per cent. Asian markets were mixed on Tuesday. Meanwhile, Brent crude rebounded around 1.6 per cent to USD 85.12 per barrel, keeping inflation and import-cost concerns in focus for India. The Dollar Index remained near two-month lows.

Going ahead, 24,400 remains an important near-term level for the Nifty, while a sustained recovery above 24,800 could bring 25,000 back into focus. Investors will also track the upcoming RBI policy decision, Q1 earnings announcements and crude oil movements. With volatility picking up, the closing trend and stock-specific earnings reactions will be important cues for the next session.

This market update is intended to provide context on the day's price action and key developments, rather than suggest any trading or investment action.

Disclaimer: The article is for informational purposes only and not investment advice.