Indices drop early gains and end in red on profit-taking

Investors’ concern about potential US recession dragged stocks

MUMBAI: On Tuesday, August 6, benchmark indices Sensex and Nifty failed to maintain their initial gains due to profit-taking, ending the day in the red. The decline was driven by ongoing investor concerns about a potential US recession, rising tensions in the Middle East, and the overvaluation of Indian stocks, which contributed to a third consecutive session of losses.

The Sensex closed at 78,593, down 166 points or 0.21 per cent, while the Nifty fell by 63 points or 0.26 per cent, ending at 23,992.55.

The Sensex had opened at 78,981.97, compared to its previous close of 78,759.40, and had briefly risen to 79,852.08 during the session. Similarly, the Nifty 50 started the day at 24,189.85 against its previous close of 24,055.60 and had climbed to 24,382.60 before retreating.

Majority of index stocks down

Among the Nifty 50 stocks, 29 out of 50 ended lower, with HDFC Life Insurance and SBI Life Insurance being the biggest decliners, falling up to 4.28 per cent. BPCL, Shriram Finance, and Mahindra & Mahindra were also significant losers on the index.

On the BSE, 17 out of 30 Sensex stocks closed in the negative, with State Bank of India, Mahindra & Mahindra, and Bharti Airtel being the major laggards.

The India VIX, a measure of market volatility, ended at 18.74 points, down 7.97 per cent on Tuesday.

The broader indices also ended lower, with the Nifty Next 50 index declining by 0.92 per cent. The Nifty MidCap 100 and SmallaCap 100 indices also saw losses of 0.61 per cent and 0.39 per cent, respectively.

Sectoral performance mixed

Sectoral performance was mixed, with Financial Services, Banking, and Oil & Gas sectors dropping by up to 1.42 per cent. In contrast, IT, Metal, Realty, Media, and FMCG sectors managed to post gains of up to 0.84 per cent.

The overall market capitalization of BSE-listed companies fell to approximately Rs440 lakh crore from Rs442 lakh crore in the previous session, resulting in a loss of about Rs2 lakh crore for investors in just one day.