Markets open weak: Sensex sheds over 700 points, Nifty slips below 24,800

Markets opened on a weak note on Tuesday, May 27, with the Nifty falling 210.80 points or 0.84 per cent to 24,790.35 and the Sensex declining 746.37 points or 0.91 per cent to 81,430.08, despite positive global sentiment following President Trump’s decision to extend the EU tariff deadline.

The benchmark indices surrendered Monday’s gains when Nifty had reclaimed the crucial 25,000 mark. Only four stocks managed to gain on the Nifty50, with Bharat Electronics Limited (BEL) leading at 0.79 per cent, followed by IndusInd Bank (0.18 per cent), Dr. Reddy’s Laboratories (0.13 per cent), and Cipla (0.10 per cent).

The broader market faced selling pressure with UltraTech Cement leading the losers at -2.02 per cent, followed by Grasim Industries (-1.98 per cent), NTPC (-1.48 per cent), Mahindra & Mahindra (-1.43 per cent), and Axis Bank (-1.42 per cent).

“The Nifty managed to close above the psychological 25000 level yesterday, but as long as the previous high of 25116 is holding, there is a small chance of a dip that holds 24462,” said Akshay Chinchalkar, Head of Research, Axis Securities. “This level is a make-or-break for bulls and bears alike, and the preferred view is that as long as it is intact, we will target the 25400 – 25600 area.”

Market analysts attributed the decline to profit-booking after Monday’s rally, despite positive global cues from Trump’s tariff extension. “Yesterday’s trading session ended on a positive note as Nifty reclaimed the crucial 25,000 mark. All sectoral indices closed in the green, with Nifty IT, Nifty Auto, and Nifty FMCG leading the charge,” noted Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

The sectors that had shown strength on Monday, including IT, Auto, and FMCG, faced selling pressure in early trade. However, analysts remain cautiously optimistic about the medium-term outlook.

“In the near-term the market is likely to consolidate around the current levels. Since mutual funds are sitting on sizeable cash any dip will be bought into and high valuations will trigger selling on rallies,” said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.

Foreign Institutional Investors (FIIs) had bought equities worth Rs 135.98 crore on May 26, while Domestic Institutional Investors (DIIs) purchased equities worth Rs 1,745.72 crore on the same day, indicating continued institutional support.

The volatility index INDIAVIX was trading at 18.02, up by 4.30 per cent from the previous session, indicating increased market uncertainty.

“The benchmark Sensex and Nifty indices are expected to open on a flat note on May 27, following GIFT Nifty trends indicating a loss of 04 points for the broader index,” said Hardik Matalia, Derivative Analyst, Choice Broking, ahead of the market opening.

Technical analysts suggest key support levels for Nifty at 25,000, followed by 24,900 and 24,800. “From this point, any dip up to 24,850 should be seen as strong support,” said VLA Ambala, Co-Founder, Stock Market Today.

The commodities market showed mixed signals with gold and silver prices hovering near $3,340 and $33.40 per ounce respectively. “Gold prices edged lower on Monday following President Trump’s decision to extend the EU tariff deadline to July 9, reducing immediate demand for safe-haven assets and lifting equities,” said Aksha Kamboj, Vice President, India Bullion and Jewellers Association.

Key events this week include the FOMC Meeting Minutes and the US PCE report, which market participants expect will influence trading direction. Additionally, Q4 results from BOSCH, JK LAKSHMI, NAUKRI, NMDC, RCF, and RCOM are scheduled for release.

“A sustained rally will happen only when leading indicators suggest revival in earnings growth. That is some time away,” cautioned Dr. Vijayakumar, suggesting investors maintain a selective approach in the current market environment.

Market participants are closely watching the 25,100 resistance level for Nifty, with a decisive breakout above this zone considered crucial for fresh buying momentum.

Published on May 27, 2025