Sensex, Nifty Fall for Second Day on IT, PSU Bank Weakness

Indian equity benchmarks extended their losing streak for a second session on Tuesday, with the BSE Sensex and NSE Nifty closing lower as selling pressure mounted in information technology (IT) and public sector undertaking (PSU) bank stocks.

The Sensex fell over 350 points during intraday trading before recovering some ground, while the Nifty slipped below the 18,100 mark. Market breadth was negative, with more stocks declining than advancing on the BSE.

IT Stocks Under Pressure

IT stocks were among the top losers, with heavyweights like Infosys, Tata Consultancy Services (TCS), and Wipro dragging the indices. Analysts attributed the weakness to concerns over slowing demand in key export markets, particularly the United States and Europe.

The Nifty IT index fell nearly 2%, marking its worst single-day drop in over a week. Broader fears of a global economic slowdown have kept investors cautious, prompting profit-booking in the sector.

PSU Banks Extend Decline

PSU bank stocks also continued their slide, adding to the pressure on the benchmarks. State Bank of India (SBI), Bank of Baroda, and Punjab National Bank were among the major laggards in the banking space.

The Nifty PSU Bank index dropped over 1.5%, extending losses from the previous session. Traders said profit-booking after recent gains and concerns over asset quality in certain segments were weighing on sentiment.

Broader Market Sentiment

Other sectoral indices also traded mixed, with auto and metal stocks showing some resilience. However, the overall mood remained cautious as investors awaited further cues from global markets and domestic economic data due later this week.

Foreign institutional investors (FIIs) were net sellers in the cash market on Monday, adding to the cautious tone. Domestic institutional investors (DIIs) provided some support but could not offset the selling pressure.

Market participants are closely watching the trajectory of crude oil prices and the movement of the rupee against the US dollar. A weaker rupee and elevated oil prices often add to inflationary pressures, impacting corporate margins.

The volatility index, India VIX, inched up slightly, indicating heightened uncertainty among traders. Analysts suggest that the market could remain range-bound in the near term until clearer directional triggers emerge.

Globally, Asian markets ended mixed on Tuesday, while European indices opened lower, reflecting risk-averse sentiment. The US Federal Reserve's upcoming policy stance remains a key overhang for emerging markets like India.

Traders are now eyeing the weekly derivatives expiry and any fresh triggers from corporate earnings announcements due later this week. The lack of strong positive catalysts has kept the market in a corrective phase.

With no major domestic event scheduled, the market direction is likely to be influenced by global cues and foreign fund flows in the coming sessions. Investors are advised to remain cautious and avoid aggressive bets until clarity emerges.