Nifty 50 Falls Over 1%; Sensex Trades Flat as RBI Policy, U.S.-Iran Talks Keep Investors Cautious

Indian equities turned cautious on Tuesday, with the Nifty 50 giving back a large part of Monday’s unusual late-session surge following the introduction of the new Closing Auction Session mechanism. Around 12:30 PM, the Sensex was trading at 78,400.83, down 238.20 points or 0.30 per cent, while the Nifty 50 slipped to around 24,509, losing 265 points or 1.07 per cent. The wider divergence between the two benchmarks continued as markets adjusted to Monday’s CAS-driven price moves.

The broader market offered a slightly better picture. Nifty Bank fell around 1.20 per cent to 57,547, making financials one of the major drags on the market. The Nifty Midcap 100 declined about 0.44 per cent to 63,397. Smallcaps, however, bucked the broader weakness, with the Nifty Smallcap 100 gaining around 0.8 per cent earlier in the session as stock-specific buying remained healthy.

Sectorally, the screen remained largely red. Nifty IT dropped around 1.3 per cent, while financial services fell more than 1 per cent. Realty stocks also remained under pressure, with DLF falling over 2 per cent after brokerages flagged subdued pre-sales and weaker cash collections. Auto stocks were lower by around 0.7 per cent. Metal was the notable major sector holding in positive territory, while PSU banks showed relative resilience compared with private financials.

Stock-specific action, however, was anything but dull. Ather Energy surged as much as 18 per cent after its Q1 FY27 net loss narrowed sharply to Rs 51 crore from Rs 178 crore a year ago. KEI Industries jumped nearly 7 per cent after quarterly profit rose 40 per cent and revenue increased 23 per cent. Paytm gained over 4 per cent following a Rs 2,038 crore block deal involving around 2.3 per cent equity. On the losing side, LIC dropped around 7 per cent after the government launched an offer for sale at a floor price of Rs 382, nearly 11 per cent below Monday’s close.

Institutional flows were supportive in the previous session. On August 3, FIIs were net buyers of Rs 922.26 crore in the cash market, while DIIs bought shares worth a net Rs 1,571.18 crore. Provisional FII and DII figures for August 4 will be available only after market hours.

Global cues were mixed. Wall Street remained supported by strong corporate earnings, while Asian markets struggled for direction. MSCI’s Asia-Pacific index excluding Japan slipped 0.1 per cent, while South Korea gained 1.2 per cent and Japan’s Nikkei added 0.2 per cent. Brent crude rebounded 1.6 per cent to USD 85.12 per barrel amid renewed tensions around the Strait of Hormuz, adding a layer of caution for Indian equities.

For the rest of the session, 24,500 remains an important near-term zone for the Nifty, while a break below 24,300 could increase downside pressure. On the upside, the 24,750 to 24,800 region remains the immediate hurdle. Traders will also track the RBI policy, ongoing Q1 earnings and crude oil movements, while today’s expiry and the new CAS mechanism could keep closing-hour volatility elevated.

The above is a snapshot of current market conditions and not a buy or sell call.

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