Indian benchmark equity indices traded firmly higher on Monday, with the BSE Sensex gaining nearly 600 points to trade around 78,300, while the NSE Nifty 50 advanced about 150 points to cross the 24,400 mark. The rally was led by strong buying in metal and automobile stocks, reflecting positive investor sentiment at the start of the trading week.

The upbeat market performance came after a strong close in the previous session, supported by gains in heavyweight stocks and improved risk appetite among investors.

Metal counters emerged as the top sectoral performers, aided by expectations of improved demand and firm global commodity trends. Auto stocks also witnessed broad-based buying as investors remained optimistic about the sector's growth outlook and improving domestic demand.

Asian Markets Trade Mixed

While Indian equities remained in positive territory, major Asian markets presented a mixed picture.

South Korea's Kospi declined 2.31 per cent, while Japan's Nikkei fell 1.18 per cent amid profit booking and cautious investor sentiment. In contrast, Hong Kong's Hang Seng Index rose 0.78 per cent, supported by gains in technology and financial stocks.

The mixed performance across Asia reflected investor caution over global economic developments, despite selective buying in regional markets.

US Markets End Previous Session Mixed

Wall Street also delivered a mixed performance in the previous trading session.

The Dow Jones Industrial Average climbed 595 points, or 1.14 per cent, while the technology-heavy Nasdaq Composite slipped 0.80 per cent. The S&P 500 ended the session largely unchanged, indicating cautious investor positioning ahead of key economic data and corporate earnings.

Foreign Investors Turn Net Buyers

Foreign Institutional Investors (FIIs) continued to provide support to domestic equities, purchasing shares worth ₹1,355 crore on Friday. However, Domestic Institutional Investors (DIIs) remained net sellers, offloading equities worth ₹1,954 crore during the session.

Despite Friday's buying, FIIs remain net sellers over the past week and month, indicating that overseas investor participation continues to be influenced by global market conditions and macroeconomic uncertainties.

Previous Session Ends on a Positive Note

The current rally follows a strong finish on Friday, July 3, when the benchmark indices extended gains.

The Sensex closed 261 points higher at 77,764, while the Nifty added 95 points to settle at 24,270, setting a positive tone for Monday's trading.

Market participants will now monitor global cues, corporate earnings, foreign investment flows and macroeconomic developments for further direction as the earnings season approaches.

Domestic equity benchmarks staged a modest recovery during early trading on Tuesday, led by buying interest in auto and realty shares. The Sensex climbed around 200 points to hover near the 73,700 mark, while the Nifty advanced over 70 points to trade above 23,200.

The uptick comes a day after the market witnessed a sharp selloff, erasing most gains from the previous week. Investors appeared to be selectively accumulating stocks, though broader sentiment remained guarded.

Auto and Realty Lead the Pack

Sectoral indices showed a clear bias. The auto index gained nearly a percent, with heavyweights like Mahindra & Mahindra and Maruti Suzuki contributing to the rise. Realty stocks also saw renewed interest, possibly on expectations of steady demand.

Banking and IT shares, however, showed mixed trends. While some frontline banking counters recovered minor losses, others remained under pressure. According to dealers, the buying was largely driven by domestic institutional investors (DIIs), who have been net buyers in recent sessions.

Mixed Signals from Global Peers

Overseas, Asian markets offered a mixed picture. South Korea’s Kospi jumped over 3.7 per cent, while Japan’s Nikkei added nearly a per cent. On the other hand, Hong Kong’s Hang Seng slipped 0.6 per cent, weighed down by concerns over China’s economic recovery.

Overnight cues from Wall Street were also uneven. The Dow Jones Industrial Average dipped 0.16 per cent, but the Nasdaq and S&P 500 ended higher, supported by technology stocks. That divergence kept Indian investors cautious about chasing sharp upsides.

FII Selling Continues Unabated

Foreign institutional investors (FIIs) remained net sellers for yet another session. Provisional data showed they offloaded equities worth roughly Rs 5,556 crore on Monday. In contrast, DIIs stepped in with purchases of about Rs 5,165 crore.

Over the past 30 days, FIIs have pulled out more than Rs 81,500 crore from Indian markets, while DIIs have pumped in over Rs 1 lakh crore. This ongoing tug-of-war between foreign and domestic money has kept the indices range-bound despite intermittent rallies.

Recap: Monday’s Sharp Fall

Just a day earlier, the market had ended in the red. The Sensex tumbled 719 points to close at 73,524 on June 8, while the Nifty dropped 244 points to settle at 23,123. Traders attributed that decline to profit-booking in financials and lingering concerns over global interest rates.

The recovery on Tuesday morning, therefore, is being viewed as a technical pullback rather than a change in trend. “We are seeing selective buying, but volumes are not very high,” a Mumbai-based dealer said, requesting anonymity.

What to Watch

Market participants will now track the movement of the rupee against the dollar and any fresh commentary from US Federal Reserve officials. Additionally, monthly auto sales data and progress of the monsoon remain near-term triggers for broader sentiment.

For now, the indices are holding small gains. But with FIIs still on the selling side, traders are advised to remain nimble, as volatility is unlikely to ease completely.

Sensex Falls 400 Points as Auto, Bank Stocks Face Selling Pressure

Market sentiment weakens amid broader Asian selloff; FII outflows continue

Indian equity markets slipped into the red on Friday, with the Sensex declining 400 points to trade at 77,450 while the Nifty fell 130 points to settle around 24,200. The half-a-percent decline reflected broader weakness sweeping across Asian bourses, even as selective buying in pharma and IT counters provided some respite.

Selling Spree in Auto and Banking

The downturn was largely driven by heavy selling in auto and banking stocks, sectors that have traditionally anchored market movements. Analysts attributed the weakness to profit-taking after recent gains and concerns over global interest rate trajectories. Meanwhile, pharmaceutical and IT shares managed to attract investor interest, suggesting a defensive shift in market positioning.

The decline came as no surprise, given overnight weakness in American markets. The S&P 500 fell 0.38 percent, the Dow Jones lost 0.63 percent, and the Nasdaq slipped 0.13 percent on Thursday evening. Across Asia, the story was similar – South Korea's Kospi fell 1.05 percent, Japan's Nikkei dropped 1.05 percent, and Hong Kong's Hang Seng declined 1.24 percent.

Foreign Investors Turn Sellers

Underlying the market weakness was continued outflow pressure from foreign investors. On Thursday, FIIs sold shares worth ₹341 crore, continuing a pattern of net selling that has accumulated to ₹39,164 crore over the past month. In contrast, domestic institutional investors remained net buyers, purchasing ₹441 crore worth of shares on the day and ₹31,092 crore over the last 30 days.

Yesterday's Close Still Negative

Friday's decline built on Thursday's weakness, when the Sensex had lost 114 points to close at 77,845 and the Nifty slipped 4 points to 24,327. That day had seen strength in auto and realty stocks offset by weakness in FMCG, suggesting volatility across sectors.

What's Next

Market participants remain cautious as global cues continue to dominate local sentiment. Analysts expect support levels around 24,100 on the Nifty and 77,200 on the Sensex in the near term. However, the persistence of FPI selling and soft global growth signals suggest further downside risks unless sentiment shifts.

Traders are now eyeing inflation data and commentary from central banks globally for fresh directional cues. Domestic earnings season will also be critical in determining whether current valuations hold or face further compression.