Sensex, Nifty fall sharply, snapping three-day rally amid global jitters

Indian equity benchmarks fell sharply on Thursday, ending a three-session winning streak, as weak global cues, selling pressure in metal stocks and caution ahead of the Reserve Bank of India’s policy decision weighed on sentiment.

Around midday, the Sensex was down 513 points, or 0.61 per cent, at 83,305, while the Nifty slipped 162 points, or 0.63 per cent, to 25,614. The decline was broad-based, with mid-cap and small-cap stocks also under pressure.

The Nifty Midcap 100 index fell about 1 per cent, while the Nifty Smallcap 100 dropped 1.5 per cent, reflecting widespread profit-taking after recent gains.

Metal stocks led the losses, with the sectoral index sliding nearly 2 per cent, tracking weakness in global metal prices. The fall followed a strong rally of nearly 6 per cent in the metal index over the previous three sessions. Hindalco Industries was among the biggest laggards on the Nifty 50, along with InterGlobe Aviation and Tata Motors Passenger Vehicles, which declined by up to 4 per cent.

Hindustan Unilever and State Bank of India bucked the trend, rising as much as 2 per cent and emerging as the top gainers on the benchmark index. Market breadth remained negative, with declining shares outnumbering advances.

Analysts said markets were also seeing profit-booking after a recent surge driven by optimism over a potential India–US trade deal. Most sectoral indices were trading in the red, with the exception of IT and PSU banks. The IT index edged higher after a steep fall in the previous session, triggered by concerns over artificial intelligence-led disruption following the launch of new automation tools by Anthropic.

“There are a few near-term market trends that are significant. The Nifty appears to be in a consolidation phase without big moves at the index level, but there are sharp changes within index stocks,” said V K Vijayakumar, chief investment strategist at Geojit Investments.

Global cues were weak, adding to the pressure. In Asia, South Korea’s Kospi plunged more than 3 per cent, while Japan’s Nikkei, China’s Shanghai Composite and Hong Kong’s Hang Seng were also trading lower.

Overnight, US markets closed mostly in the red, with the Nasdaq Composite tumbling 1.51 per cent and the S&P 500 slipping 0.51 per cent, even as the Dow Jones edged higher.

Foreign institutional investor activity offered limited support, with FIIs marginal net buyers on Wednesday, purchasing equities worth about ₹30 crore — sharply lower than inflows seen earlier in the week.

Investors were also cautious ahead of the RBI’s monetary policy decision due on Friday. The central bank’s six-member Monetary Policy Committee began its meeting on Wednesday, with most economists expecting a status quo on interest rates.

Volatility remained elevated, with India VIX trading above 12, signalling heightened nervousness among investors. Thursday’s Sensex derivatives expiry further added to intraday swings, as position unwinding and rollovers typically increase volatility.

Despite the day’s decline, both the Sensex and Nifty have gained nearly 4 per cent over the past three sessions, supported by optimism around easing trade tensions with the US.

On the technical front, analysts said the market remains range-bound. Resistance for the Nifty is seen around 25,800–26,000, while key support lies near the 25,600 level. With no clear directional trend, experts advised traders to adopt a level-based strategy in the near term.

With agency inputs