Sensex snaps 3-day winning run, dips 111 points dragged by bank, IT stocks

Among Sensex stocks, Kotak Bank, , ICICI Bank, , and closed in the red, while M&M, , , and ended closed with gains.

Financial services, the highest-weighted sub-index on the Nifty, fell 0.22% following three sessions of gains on the back of the Reserve Bank of India easing provision norms on investments into alternative investment funds.

US rate-sensitive IT stocks fell 0.7%, after manufacturing data signalled strength in the US economy that could allow the Federal Reserve to delay rate cuts. Markets are pricing in a 62.1% chance of a 25 basis points rate cut in June.

Meanwhile, the more domestically focussed small and midcaps were up about 1.2% each.

Aditya Birla Fashion and Retail closed 11.6% after the apparel retailer said it was planning to demerge Madura Fashion & Lifestyle, which contributes over 70% of its total revenue, into a separate listed entity.

IREDA shares closed in a 5% upper circuit after the firm reported record growth in loan book in the fourth quarter of FY24.

The market capitalisation of all listed companies on the BSE surged by Rs 2.42 lakh crore to Rs 395.57 lakh crore. The market breadth was skewed in favour of the bulls. About 2,849 stocks gained, 1,002 declined, and 108 remained unchanged on the BSE.

Expert Views

“Markets witnessed select profit-taking in banking and IT stocks as caution prevailed throughout the session ahead of the RBI monetary policy decision on Friday," said Prashanth Tapse, Senior VP (Research), Mehta Equities.

"We are seeing renewed optimism in the broader market in the mid & smallcap stocks after the sharp correction over the past few months. There is a lot of money waiting on the sidelines to be invested in medium enterprises amid easing valuations and hopes of strong economic growth going ahead," Tapse said.

Nagaraj Shetti, senior technical research analyst at HDFC Securities, said, "The short-term trend of Nifty remains positive. Though Nifty is placed at the crucial overhead resistance around 22,500 levels, still there is no confirmation of any reversal pattern unfolding at the highs. A decisive move above the hurdle of 22,500-22,600 levels could open more upside in the near term. Immediate support is at 22,350 levels."

Global Stocks

European stocks rose to a new all-time high on Tuesday and the dollar held firm as traders reduced their expectations for US Federal Reserve rate cuts and waited for the eurozone inflation data to give clues about the European Central Bank's path.

MSCI's broadest index of Asia-Pacific shares outside Japan was 0.65% higher, mainly due to Hong Kong stocks. The Hang Seng Index was up more than 2%, catching gains as the financial hub reopened after public holidays on Friday and Monday.

Oil Rises

Oil prices rose on Tuesday, underpinned by signs that demand may improve China and the US, the world's biggest oil-consuming nations, and growing concerns of a widening conflict in the Middle East that could affect supply from region.

Brent futures for June delivery rose $1.48 to $88.9 a barrel. U.S. West Texas Intermediate (WTI) crude futures for May rose $1.57 cents to $85.28 a barrel, after reaching the highest close for a front-month contract since October 27 in the previous session.

Currency Watch

The Indian rupee ended little changed on Tuesday after hovering in a tight band through the session as dollar sales by exporters helped offset weakness in the currency's Asian peers.

The rupee closed at 83.3850 against the US dollar, barely changed from its close at 83.40 in the previous session.

(With inputs from agencies)