Sensex-Tanks-Over-1,000-Points,-Dalal-Street-Turns-ReWith inflation data and global cues on the radar, markets remain highly volatile

 

The Indian stock market is trading in the red, reversing the sharp gains recorded in the previous session. Investors across Dalal Street are seeing significant volatility today as benchmark indices take a hit amid profit booking, global market movements, and sector-specific pressures. 

 

Market Overview

 

The BSE Sensex is trading over 1,000 points lower in intraday trade, dropping to an intraday low of around 81,336. The broader NSE Nifty 50 has also seen a fall below the psychological 24,700 mark, touching a low of 24,635. 

This sharp decline comes just a day after a massive rally on May 12, where both indices surged more than 3%. That rally was largely fueled by two positive geopolitical developments—first, the ceasefire agreement between India and Pakistan, and second, improving diplomatic ties between the U.S. and China. These factors had boosted investor confidence and pushed stocks sharply higher. 

However, with markets reaching near-term highs in yesterday’s session, many traders and institutional investors are now booking profits. This is creating pressure on large-cap stocks and dragging indices lower. 

 

Sector-wise Performance 

 

The biggest drag on the market today comes from two major sectors—Information Technology (IT) and Banking. 

 

IT Sector 

 

Shares of top IT companies such as Infosys, Wipro, and HCL Technologies are down significantly in today’s trade. Weak global technology demand and cautious guidance from U.S.-based tech giants are impacting investor sentiment in the Indian IT sector. 

Concerns also linger over U.S. interest rates and the impact on discretionary tech spending. This is resulting in heavy selling across large IT counters. 

 

Banking Sector 

 

Banking stocks are also seeing strong selling pressure. Leading private banks like HDFC Bank, ICICI Bank, Axis Bank, and Kotak Mahindra Bank are down in today’s session. Traders attribute this to a combination of profit booking and cautious sentiment ahead of key macroeconomic data releases, including India’s April inflation numbers. 

Market experts are also pointing to rising bond yields and cautious commentary from global central banks as key reasons for subdued interest in banking stocks. 

 

Mid-Cap and Small-Cap Stocks: Outperforming Broader Market 

 

Interestingly, while frontline indices are down sharply, the mid-cap and small-cap segments are showing relative strength. The BSE Midcap and Smallcap indices are trading in positive territory or with only marginal losses. 

This divergence shows selective interest from investors in niche and growth-oriented stocks. Many mid- and small-cap companies with strong earnings visibility are attracting attention, especially in sectors like capital goods, defense, pharmaceuticals, and real estate. 

Market participants suggest that domestic institutions and retail investors are helping support midcap stocks even as foreign institutional flows into large caps slow down. 

 

Pharma Sector Shows Resilience 

 

Among the few sectors showing strength today is the pharmaceutical sector. Stocks like Sun Pharma, Dr. Reddy’s Laboratories, and Cipla are trading higher. The gains are supported by positive news from the U.S. Food and Drug Administration (USFDA), new drug approvals, and stable export outlooks. 

Pharma remains a defensive sector during market volatility, and current buying interest indicates that traders are looking to shift to relatively safer sectors. 

 

Foreign Institutional Investors (FIIs) 

 

Foreign investors have been active participants in the Indian market since mid-April. FIIs have pumped in over ₹46,000 crore into Indian equities during the past month. 

However, there are concerns that this flow could slow down or shift towards other emerging markets like China, especially after the recent trade pact signed between the U.S. and China. Analysts believe that while India remains an attractive long-term destination, some reallocation of global capital may occur in the short term. 

Despite this, India continues to benefit from a strong domestic consumption story and policy support, which keeps overall investor sentiment positive in the medium term. 

 

Global Market Influence 

 

Global markets are also showing mixed cues. Asian indices are trading flat to negative, while U.S. stock futures are down slightly. The global mood remains cautious ahead of key economic data releases such as U.S. inflation and jobless claims, which could influence the U.S. Federal Reserve’s next rate decision. 

Oil prices remain volatile as well, with concerns about slowing demand in Europe and possible production cuts by OPEC+. Rising energy prices could impact inflation in emerging markets like India. 

 

Key Data to Watch 

 

One of the biggest triggers for the market later today is the release of India’s Consumer Price Index (CPI) inflation data for April. This data is closely tracked by investors and policymakers alike. A higher-than-expected number could hurt sentiment further, especially in rate-sensitive sectors like banking, real estate, and automobiles. 

Traders are also waiting for corporate earnings announcements from key index companies. Market direction may hinge on the earnings momentum and management guidance for the next quarter. 

 

Outlook 

 

Market experts believe that today's sharp fall is largely technical and driven by profit booking after yesterday’s gains. However, volatility is expected to continue in the near term due to multiple factors—global uncertainty, rising interest rates, inflation data, and foreign investor activity. 

There is also a shift in investor preference from large-cap stocks to mid- and small-caps, where valuations are relatively attractive and earnings potential is strong. 

Going forward, analysts recommend a cautious approach, with a focus on quality stocks across sectors like pharma, capital goods, telecom, and select consumer businesses. Defensive sectors may outperform in the short run until more clarity emerges on inflation and global central bank actions. 

The Indian stock market is witnessing a sharp correction on May 13, 2025, with both Sensex and Nifty facing heavy losses due to profit booking and weak cues from global markets. While frontline indices are in the red, certain sectors like pharma and the broader mid-cap space are showing resilience. 

With crucial economic data releases and global events lined up, traders and investors are closely tracking developments to gauge the next direction of the market. Caution, diversification, and stock-specific strategies remain the key to navigating the ongoing volatility.