Sensex and Nifty Decline as Large-Cap Stocks Weigh on Indian Markets
| 2025-05-27
The Sensex fell by 625 points on May 27, ending a two-day winning streak amid broad market volatility.
Indian stock markets fell on 27 May, with Sensex down 625 points and Nifty losing 175 as profit booking hit large-cap stocks, while mid- and small-caps outperformed.
India’s key equity benchmarks retreated on Tuesday, halting a two-day winning streak amid global market uncertainty and investor caution over stretched valuations. The BSE Sensex, which tracks 30 of India’s largest companies, fell by 625 points, or 0.76 per cent, to close at 81,551.63. Meanwhile, the broader Nifty 50 index ended 175 points, or 0.70 per cent, lower at 24,826.20.
The downturn came as traders engaged in profit-taking in heavyweight stocks, while focusing selectively on smaller companies. The BSE Midcap and Smallcap indices posted marginal gains of 0.18 per cent and 0.19 per cent, respectively.
Market Capitalisation Losses
The overall value of companies listed on the Bombay Stock Exchange (BSE) declined by nearly ₹1 lakh crore (approximately USD 12 billion), falling from ₹445 lakh crore to ₹444 lakh crore in a single session. The drop highlights the extent of selling pressure in India’s large-cap segment.
Weak Global Cues and Valuation Concerns
Market analysts attributed Tuesday’s losses to a combination of weak global cues and domestic valuation concerns. “The domestic market witnessed volatility and snapped a two-day rally, as investors opted for profit booking driven by valuation concerns and weakness across Asian markets,” said Vinod Nair, Head of Research at Geojit Financial Services.
He added that the Nifty 50 once again struggled to decisively breach the key resistance level of 25,000, reflecting the absence of fresh positive triggers. Subdued participation from foreign institutional investors (FIIs) and muted corporate earnings from blue-chip companies further dampened sentiment.
Sectoral Performance
Most sectors ended the day in negative territory. The Nifty IT, FMCG, Auto and Financial Services indices declined by more than half a per cent each. The Nifty Bank index lost 0.39 per cent, while the Private Bank index dropped 0.46 per cent.
Among sectoral indices, only the Nifty PSU Bank (up 0.26 per cent), Realty (up 0.24 per cent) and Pharma (up 0.11 per cent) managed to close in the green.
Notable Stock Movements
Within the Nifty 50, only 10 stocks posted gains. Jio Financial Services led the pack with a rise of 3.87 per cent, followed by IndusInd Bank at 2.61 per cent, and retail brand Trent with a 0.80 per cent increase.
In contrast, UltraTech Cement was the day’s worst-performing Nifty stock, dropping 2.28 per cent. JSW Steel fell by 2.02 per cent, while diversified conglomerate ITC declined 1.85 per cent.
IndiGo parent InterGlobe Aviation Ltd also declined by 2 per cent after reports suggested co-founder Rakesh Gangwal was the seller in a substantial block deal.
Broader Market Trends
Despite losses in benchmark indices, investor interest in mid- and small-cap stocks persisted. The Nifty Midcap 100 index rose by 87 points to settle at 57,155, reflecting confidence in earnings growth potential in smaller companies.
Over 100 stocks hit their upper circuit limits during the session, including Aditya Birla Money, Suven Life Sciences, and ITI. Meanwhile, 51 stocks were locked in lower circuits. Notably, 13 companies recorded intraday gains of over 10 per cent, among them Delta Manufacturing and Shriram Properties.
At the same time, three stocks — RateGain Travel Technologies, Cords Cable Industries, and Tracxn Technologies — declined between 9 and 10 per cent.
Market Breadth and Highs/Lows
On the National Stock Exchange (NSE), the market breadth remained balanced, with 1,412 stocks advancing and 1,462 declining, while 81 shares closed unchanged.
Eighty-nine stocks reached new 52-week highs, including APL Apollo Tubes, Bharat Dynamics, and Tourism Finance Corporation of India. Conversely, 26 stocks recorded new 52-week lows.
Context: Indian Stock Markets Amid Global Volatility
Indian markets have been grappling with a mix of global and domestic factors in recent weeks. Internationally, concerns over US interest rates, inflationary pressures in advanced economies, and geopolitical tensions in the Middle East and Eastern Europe have unsettled global financial markets.
Domestically, India’s large-cap stocks have faced valuation pressures following a robust rally over the past year. Analysts suggest that foreign investor inflows have slowed amid these high valuations and the absence of new economic catalysts.
Meanwhile, mid- and small-cap companies have drawn interest from domestic retail investors, encouraged by stronger-than-expected earnings in the final quarter of the previous financial year, alongside expectations of continued growth in the first quarter of the new fiscal year (Q1 FY26).
Conclusion
As India’s stock markets continue to navigate mixed signals, analysts remain watchful of global developments and domestic earnings trends. While large-cap stocks may experience intermittent corrections due to valuation concerns, the resilience of the mid- and small-cap segments suggests selective investment opportunities remain for risk-tolerant investors.
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