The Sensex ended 1,000 points off the highs of the day, while the Nifty fell over 250 points from the day’s high. However, both the indices managed to close in the green.
IndusInd Bank, Dr. Reddy’s and Adani Enterprises were among the top losers on the Nifty 50 index, while UltraTech, Trent and Bajaj Finserv bucked the trend.
Here are some factors that could have triggered the sell-off from the highs:
Trump Tariff Tantrums
There is still lingering uncertainties with regards to what happens on April 2, which is the day reciprocal tariffs kick in. There has been various hints dropped by US President Donald Trump on concessions to some countries, but he has his cards close to his chest. US and India’s trade representatives will be holding talks soon and that may determine the course ahead.
As per reports from Reuters, India is open to cutting tariffs on 55% of US imports and the offer hinges on relief from Trump’s tariffs.
Profit Booking
From the March 4 low of 21,964, the Nifty has surged nearly 1,700 points. The Midcaps and Smallcaps too have seen gains in double digits. A recovery like that would have prompted some market participants to take some profits off the table, particularly in the broader markets.
Weak Global Cues
Indian equities went into the trading session on Tuesday after a strong handover from Wall Street. However, futures are exhibiting sluggish moves, as has been the case through the day. Other Asian peers too lagged, particularly those in Hong Kong.
The Hang Seng Tech index fell as much as 3% on Tuesday in a bout of profit booking there as well. Despite the fall, the Hang Seng is still up 24% so far this year.
Jai Bala of cashthechaos.com expects the Nifty to see a pullback to levels of 23,200 followed by another swing high. He sees resistance at levels of 24,230 and supports at 23,275 and 23,100 levels.
