Dalal Street Swings Wild: Sensex Drops 900 Points Before Sharp Rebound Amid Profit-Taking

GG News Bureau
Mumbai, 13th May: Indian equity markets opened on a volatile note Tuesday, with the BSE Sensex crashing over 900 points in early trade before rebounding sharply, underscoring heightened investor nervousness following Monday’s euphoric rally.

At 9:33 am, the Sensex had dropped 902.68 points to 81,527.22, while the NSE Nifty50 slipped 229.60 points to 24,713.60. Most sectoral indices showed mixed trends, reflecting the broader market unease. However, as the session progressed, both benchmarks pared their losses, with the Sensex trimming its fall to nearly 400 points and the Nifty staging a similar recovery, helped by dip-buying activity.

Analysts attributed the choppy session to profit-booking after Monday’s sharp upsurge, which was driven by a combination of geopolitical relief and a sovereign credit rating upgrade. The temporary ceasefire between India and Pakistan, coupled with a 90-day US-China tariff rollback, had boosted sentiment, prompting aggressive buying across sectors.

“Volatility was expected,” said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services. “Monday’s rally was more about short-covering and retail enthusiasm than driven by strong institutional flows.” He noted that foreign and domestic institutional investors (FIIs and DIIs) net bought stocks worth only ₹2,694 crore on Monday, indicating limited backing from large players.

Dr. Vijayakumar also pointed to possible strength in Indian IT stocks, supported by an improving US macro outlook, but warned that pharma exporters could face pricing pressures after the US administration signaled tighter drug pricing controls.

Despite the volatility, market experts maintain a cautiously optimistic outlook for the medium term. Stabilising global cues and easing tensions with Pakistan are seen as positive for investor sentiment, but experts urge investors not to chase rallies blindly.

“Remain optimistic but stay cautious,” advised one market veteran. “Watch global signals closely and avoid making impulsive moves during intraday swings.”

With geopolitical dynamics and global trade developments still fluid, investors are likely to see more turbulent sessions ahead, making disciplined investing and stock selection crucial in navigating the current market terrain.