Benchmark equity indices ended the session slightly in the red on Tuesday, though they managed to recover a large part of the losses seen during early trade. Market sentiment remained cautious throughout the day as sustained foreign institutional investor (FII) outflows and the lack of progress on a much-anticipated India–US trade agreement continued to weigh on investor confidence.
The S&P BSE Sensex slipped by 54.30 points to settle at 85,213.36, while the NSE Nifty50 declined by 19.65 points to close at 26,027.30. Both indices had fallen more sharply in the initial hours but gradually pared losses as selective buying emerged in heavyweight stocks.
According to Vinod Nair, Head of Research at Geojit Investments Limited, persistent selling by foreign investors, combined with ongoing weakness in the rupee, has kept equity markets confined to a narrow trading range. He noted that currency volatility is likely to persist until greater clarity emerges regarding the India–US trade negotiations.
Nair added that expectations of an earnings recovery in the second half of FY26, supported by both monetary easing and fiscal growth initiatives, are helping prevent deeper corrections and are lending some stability to market sentiment. He said that going forward, market direction is likely to be driven more by corporate earnings performance rather than valuation expansion. Investors, he added, are also closely watching key global macroeconomic data, particularly US consumer inflation and unemployment figures, as these will influence global liquidity conditions and shape interest rate expectations for 2026.
On the stock-specific front, Hindustan Unilever emerged as the top gainer among Sensex constituents, rising 1.37 per cent. Trent followed with a gain of 0.79 per cent, while HCL Technologies advanced 0.68 per cent. Asian Paints added 0.53 per cent, and Tata Steel climbed 0.52 per cent, collectively providing some support to the benchmark indices.
Meanwhile, Mahindra & Mahindra was the biggest drag on the market, falling 1.94 per cent. Maruti Suzuki declined 0.89 per cent, Adani Ports slipped 0.81 per cent, Bajaj Finserv eased 0.75 per cent, and HDFC Bank lost 0.56 per cent, contributing to the overall muted close.
Ajit Mishra, Senior Vice President of Research at Religare Broking, said market indicators suggest continued consolidation in the near term, with the Nifty likely to trade within the 25,800–26,200 range. He cautioned that volatility and choppiness may persist due to the weekly derivatives expiry and ongoing currency fluctuations.
Mishra advised that sectoral focus in the next session should remain on banking and IT stocks, given their heavy weightage in the indices and their sensitivity to fund flows. He also noted that defensive sectors and commodity-linked themes could offer short-term tactical opportunities. Traders, he said, should adhere to disciplined risk management strategies and avoid averaging down in underperforming stocks.
