Sensex drops 200 points on US Fed's hawkish comments, FII selling; Nifty below 22,500

Among the components, Nestle India, M&M, and HUL emerged as the top laggards, witnessing declines of 1-2.5%. UltraTech Cement, Axis Bank, TCS, Infosys, and Bajaj Finserv also started the session on a lower note. Conversely, Tata Steel, Power Grid, JSW Steel, Bharti Airtel, and SBI opened higher.

Volatility in reached 22.3, the highest level since February 2022.

Barring Metal, PSU Bank and Oil & Gas, all sectoral indices opened in the red. Metal rose nearly 1%, led by SAIL, Vedanta, and Hindustan Zinc.

Among individual stocks, fell nearly 9% post Q4 results. The company reported a narrowed loss of Rs 69 crore in the fourth quarter of FY24, compared to a loss of Rs 159 crore in the year-ago quarter.

Experts View
"With 5 stages in the 7-stage elections completed, the market is slowly showing signs of stability. The negative trigger of sustained also seems to be over when the FIIs turned buyers last Friday" said Dr. V K Vijayakumar, Chief Investment Strategist, .

"The prime minister has hinted about a sharp rally in the market after June 4th. The market is likely to move ahead before the election results since the market is smart enough to anticipate the results," Vijayakumar added.

Deven Mehata, Research analyst at , said, "Nifty can find support at 22,400 followed by 22,350 and 22,300. On the higher side, 22,600 can be an immediate resistance, followed by 22,650 and 22,700."

Global Markets
Asian peers opened lower on the day, with the outside Japan shedding 0.87%. Overnight, equities were mixed as hawkish comments from Fed officials weighed on sentiment.


Foreign investors have sold Indian shares worth Rs 28,242 crore in May so far, the highest in 16 months since January 2023.

Sustained foreign selling is driven by relatively high valuations in Indian equities compared to other emerging market peers like China, as well as caution ahead of national election results on June 4. However, domestic institutional investors have been net buyers in 19 of the last 20 sessions, lending stability to markets.

Oil Prices Fall
Oil prices fell in early Asia trade on Tuesday, with investors anticipating lingering U.S. inflation and higher interest rates to depress consumer and industrial demand.

Brent crude futures fell 44 cents, or 0.53%, to $83.27 a barrel. U.S. West Texas Intermediate crude (WTI) slipped 51 cents, or 0.64%, to $79.29 a barrel.

Rupee Strengthens
The Indian rupee rose 6 paise to 83.31 against the US dollar in early trade. The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, rose 0.1% to 104.66 level.

(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)