Markets Slide as FIIs Sell Aggressively & Rupee Breaches 90 Mark: What Drove Tuesday’s Fall?

Indian equities extended their losing streak on Tuesday, weighed down by heavy selling in banking majors, weakness in Reliance Industries, and persistent foreign outflows. After touching record highs earlier this week, markets witnessed sharp profit‑booking as global and domestic cues turned cautious.

 Benchmark Indices—Third Straight Decline

The Indian market witnessed notable weakness:

• Sensex plunged 503.63 points (0.59%) to 85,138.27
  • Intraday low: 85,053, down nearly 589 points

• Nifty50 declined 143.55 points (0.55%) to 26,032.20

This marks the third consecutive session of decline, despite Monday’s intraday all-time highs.

 What Triggered the Sell-off?

1. Heavy Selling in Banking & Index Heavyweights

Major drags included:

• Axis Bank

• HDFC Bank

• Reliance Industries

• ICICI Bank

• Bharat Electronics

• Larsen & Toubro

These stocks collectively weighed heavily on headline indices.

2. Persistent FII Outflows

Foreign investors continued their selling spree:

• FIIs sold ₹1,171 crore on Monday

• Over the last three sessions, FIIs have offloaded ₹6,000+ crore

DII buying (₹2,559 crore) provided partial support but couldn’t offset the broader weakness.

3. Rupee Breaches Historic Threshold

The Indian rupee hit the psychologically crucial ₹90 per USD in intraday trade, before settling at an all-time low of ₹89.99.

A weak currency worsens:

• FII sentiment

• Import costs

• Overall risk appetite

4. Delay in Indo–US Trade Deal

Uncertainty around the highly anticipated trade agreement has added another layer of investor anxiety.

5. Macro Concerns Ahead of Fed & RBI Decisions

Markets are cautious ahead of major policy announcements:

• US Federal Reserve decision

• RBI Monetary Policy Committee (MPC) outcome

• Recent IIP contraction also dampened sentiment

Gainers of the Day

Despite the sell-off, a few names stood out:

• Asian Paints

• Maruti Suzuki

• Bharti Airtel

• Bajaj Finance

These stocks showed strength on stock-specific momentum.

 Global & Sectoral Snapshot

Sectoral Performance

Declines were seen across:

• Services (‑1.03%)

• Financial Services (‑0.78%)

• Bankex (‑0.75%)

• Industrials (‑0.49%)

• Utilities (‑0.40%)

Gainers included:

• Telecom

• Consumer Durables

• Tech

• Auto

Midcaps & Smallcaps

• BSE Midcap: ‑0.14%

• BSE Smallcap: ‑0.49%
  Broader markets also reflected pressure, with:

• 2,563 stocks declining

• 1,586 advancing

Global Markets

• Asia: Mixed – Shanghai down; Kospi, Nikkei, Hang Seng higher

• Europe: Trading higher

• US: Closed lower on Monday

• Brent Crude: Down 0.33% to $62.96

 Analyst Takeaways

FII selling + Rupee weakness = Short-term pressure

Prashanth Tapse (Mehta Equities):

“Valuations remain elevated and delays in US–India trade deal are adding anxiety. The rupee’s downward spiral is increasing investor discomfort.”

Ajit Mishra (Religare Broking):

“Weak IIP data and looming policy events are adding to near-term caution.”

 Bottom Line

The market remains in a healthy consolidation phase after record highs.
Key triggers to watch:

• Rupee stabilisation

• FII flows

• RBI & Fed outcomes

• Direction of Indo–US trade talks

Long-term fundamentals remain intact, but volatility is likely to persist in the short term.

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