Major Indices Break Seven-Day Winning Streak Amid Profit-Booking and Sectoral Weakness
Mumbai, March 26: Indian equity markets experienced a sharp downturn on Tuesday, snapping a seven-day gaining streak, as profit-booking, sectoral weaknesses, and global uncertainty weighed on investor sentiment. The Sensex plunged 728.69 points (0.93%) to close at 77,288.50, while the Nifty dropped 181.80 points (0.77%) to end at 23,486.85.
The market decline was led by banking heavyweights such as SBI, HDFC Bank, and ICICI Bank, along with losses in oil & gas, pharma, and IT sectors. Broader market indices also faced selling pressure, reflecting a broad-based decline across large, mid, and small-cap stocks.
Profit-Booking and March-End Pressures Weigh on Markets
Market analysts attributed the sudden decline to profit-booking after a strong rally, along with domestic institutional selling and quarter-end closing pressures.
Aishvarya Dadheech, Founder and CIO of Fident Asset Management, noted that the correction is a natural pause rather than a panic-driven selloff.
“This decline seems like a natural pause to an overbought phase rather than a reaction to global tariff uncertainties. Several key positives such as a weaker dollar index, rupee appreciation, and reduced foreign institutional investor (FII) outflows indicate that the Indian market remains fundamentally strong,” Dadheech said.
Additionally, concerns regarding the upcoming April 2 tariff deadline and the RBI’s monetary policy meeting have added to the market’s cautious stance.
Sectoral Performance: Banking, Oil & Gas, and Pharma Lead Declines
The broader market also followed weak trends, with the Nifty Midcap 100 falling 0.6% and the Nifty Smallcap 100 dropping 1%.
Banking Stocks Slide Amid Uncertainty
Nifty Bank declined over 1%, with major losses in SBI, HDFC Bank, and ICICI Bank.
PSU banks also suffered a heavy selloff as investors booked profits.
Private banking stocks remained under pressure following reports of potential leadership changes at IndusInd Bank.
Oil & Gas Stocks Tumble on Weak Energy Outlook
BPCL, ONGC, and Reliance Industries dragged the Nifty Oil & Gas index down by more than 1%.
Crude oil price fluctuations and concerns over energy demand contributed to the decline.
Pharma Stocks Extend Losses Amid Global Market Weakness
Cipla, Sun Pharma, and Dr. Reddy’s saw declines as investor sentiment weakened in the sector.
The Nifty Pharma index dropped over 1%, reflecting concerns over export growth and pricing pressures.
IT and FMCG Stocks Face Pressure
The Nifty IT index slipped 0.98% as global economic concerns dampened tech sector prospects.
FMCG stocks saw mild losses, with Hindustan Unilever and Nestle India witnessing marginal declines.
Broader Market Trends: Smallcaps Offer Value, Midcaps Remain Expensive
Despite the sharp decline, analysts see value emerging in smallcaps, while midcaps remain relatively expensive.
“Midcaps are still trading at premium valuations, requiring a selective approach. However, smallcaps have entered an attractive zone, supported by strong earnings growth potential,” Dadheech said.
Market sentiment remains cautious as investors evaluate sectoral fundamentals and global risk factors.
Stock-Specific Action: Siemens Gains, Zomato and Swiggy Decline
Siemens Ltd Surges on Demerger Approval
Siemens Ltd jumped 7% after the National Company Law Tribunal (NCLT) approved the company’s demerger plan.
The restructuring will separate Siemens Energy India Ltd as an independent entity.
Shareholders will receive one Siemens Energy India share for each Siemens Ltd share held as of April 7, 2025.
Zomato and Swiggy Face Selling Pressure
Zomato and Swiggy stocks fell up to 4% following a downgrade by Bank of America Securities.
BofA downgraded Zomato to ‘Neutral’ from ‘Buy’ and Swiggy to ‘Underperform’.
The brokerage cited concerns over profitability and competitive pressures in the food delivery sector.
IndusInd Bank Declines Amid CEO Speculation
IndusInd Bank shares closed 3% lower following reports of potential leadership changes.
Moneycontrol reported that the bank may hire global executive search firms Egon Zehnder and Korn Ferry to identify a new CEO.
The RBI has reportedly urged current CEO Sumant Kathpalia to step down, although the bank has denied these claims.
Technical Outlook: Nifty and Sensex
Market experts believe that technical indicators suggest caution, with key support and resistance levels playing a critical role in short-term movements.
Support and Resistance Levels for Nifty
23,600 was a key support level on Monday and prevented a sharper fall.
If Nifty weakens further, it could test 23,300 in the coming sessions.
A recovery above 23,700–23,760 may slow the decline.
A rally to 24,200 seems unlikely in the near term unless positive triggers emerge.
Sensex Trends and Market Sentiment
Sensex has entered a consolidation phase after strong gains in the past week.
Further selling pressure could lead to a retest of the 76,800–77,000 range.
Anand James, Chief Market Strategist at Geojit Financial Services, emphasized the importance of closely monitoring support levels.
“The 23,600 level provided support yesterday, but if the market weakens further today, it could break down to 23,300. Investors should be cautious in the short term,” James said.
Factors Influencing Market Movement in the Coming Days
Global and Domestic Economic Events
April 2 Tariff Deadline: Markets are closely watching trade developments as the deadline for potential reciprocal tariffs on US goods approaches.
RBI Monetary Policy Meeting: Investors await cues on interest rates and liquidity measures.
Crude Oil Prices: Fluctuations in global oil prices continue to impact energy and commodity-related stocks.
Foreign Institutional Investment (FII) Trends: A rebound in FII inflows could provide market support, while outflows could trigger further declines.
Highlights from the Market Selloff
Sensex and Nifty declined sharply, snapping a seven-day rally.
Banking, oil & gas, and pharma sectors led the downturn.
Broader markets showed weakness, but smallcaps may present value opportunities.
Stock-specific actions influenced market movements, with Siemens gaining and Zomato declining.
Technical indicators suggest cautious sentiment, with key support levels in focus.
Upcoming global and domestic economic events will determine market direction.
