Profit booking triggered a sharp reversal in Indian equities Thursday, ending a three-day rally. The Sensex closed at 83,313.93, down 503.76 points or 0.60%, with Nifty at 25,642.80, off 133.20 points or 0.52%.
Heavy selling in defense names set the tone: HAL down 4.31%, Data Patterns 3.63% lower, Cyient DLM 3.34% off. Indices like Nifty Defence (-2.10%), Metal (-1.02%), Consumer Durables (-0.82%), Manufacturing (-0.59%), and Consumption (-0.59%) all ended red.
Gainers included Nifty PSU Bank (+0.38%) and Healthcare (+0.14%). Mid and smallcaps lagged: Midcap 100 -0.28% to 59,517.10, Smallcap 100 -1.20% to 16,983.90.
Market participation skewed bearish on BSE, with 2,447 decliners outnumbering 1,737 advancers; 158 unchanged. The rupee appreciated 0.22% to 90.30/USD, aided by dollar softness, commodity price retreats, and US-India trade deal positivity.
Jatin Trivedi of LKP Securities explained the rupee strength stems from these factors, adding that RBI’s Friday policy will be pivotal. This session’s decline reflects rotation from high-flying sectors, but underlying fundamentals stay strong with robust bank credit growth and capex revival.
Looking ahead, strategists see support levels holding firm, with potential rebound if earnings season delivers. Global cues from US jobs data and ECB stance will also influence sentiment.