Indian equity markets traded under pressure on Tuesday, with the Sensex and Nifty slipping into the red by early afternoon, reflecting a combination of sustained foreign fund outflows, muted global cues, and expiry-related volatility. The decline comes at a time when domestic benchmarks are hovering near record zones, making markets more sensitive to external and technical triggers.

Over the past few sessions, Indian equities have struggled to extend gains despite strong domestic macro signals and steady retail participation. One of the dominant drags has been consistent selling by Foreign Institutional Investors (FIIs), which has offset local buying and kept benchmark indices range-bound. This divergence between domestic optimism and global caution has defined recent market action.

On Monday, FIIs sold equities worth ₹2,759.89 crore, marking the fifth consecutive session of net outflows. Such sustained selling tends to create overhead resistance for markets, especially when valuations are elevated and global risk appetite is fragile.

At around 12:15 pm, the Sensex was down 180.08 points, or 0.21 percent, at 84,515.46, while the Nifty slipped 57.55 points, or 0.22 percent, to 25,884.55. This was after a mildly positive start, where the Sensex briefly climbed to an intraday high of 84,802.64 and the Nifty touched 25,975.85 before losing momentum.

The intraday reversal highlights a lack of follow-through buying at higher levels. Traders appeared unwilling to chase the market upward amid uncertainty around global cues and upcoming derivative expiries.

The inability of benchmarks to hold early gains suggests growing caution among both institutional and short-term participants. With markets near all-time highs, any combination of foreign selling and global weakness tends to trigger profit booking rather than fresh risk-taking.

Market breadth further underlined the cautious tone. Out of the traded universe, around 1,518 stocks advanced, while 2,078 declined and 172 remained unchanged, indicating broader selling pressure beyond just heavyweight stocks.

On the Nifty50, stocks such as Eternal, Max Healthcare, and InterGlobe Aviation were among the top laggards, falling up to 2 percent. These declines reflected profit booking in pockets that had seen strong recent performance.

On the other hand, Shriram Finance and Hindalco Industries gained up to 2 percent, supported by stock-specific buying and relative value interest.

However, these gains were not sufficient to offset broader weakness.

Sectorally, selling pressure was visible in information technology, pharmaceuticals, and real estate. The Nifty IT index extended its losing streak to a fifth consecutive session, reflecting concerns over global demand, currency movement, and stretched valuations.

Weak global cues added to domestic caution. Asian markets traded lower, with South Korea’s Kospi and Japan’s Nikkei 225 in the red, while US markets also closed lower overnight. Such global softness typically impacts Indian equities through sentiment channels and potential fund flow adjustments.

Adding to concerns, Brent crude prices edged up marginally to $61.96 per barrel. While the move was modest, higher oil prices remain a structural risk for India, given its dependence on crude imports and the potential inflationary impact.

Tuesday also coincided with the weekly and monthly expiry of Nifty derivatives contracts. Expiry sessions are often marked by heightened volatility as traders roll over or square off positions. This dynamic likely amplified intraday swings and contributed to the market’s inability to sustain early gains.

According to Anand James, Chief Market Strategist at Geojit Investments, the Nifty’s failure to hold above the 26,050–26,077 zone has introduced a downward bias toward the 25,935–25,850 range.

He noted that while a short-term pullback attempt is possible, a sustained move above the 25,970–26,000 band would be required to re-establish upside momentum. Until then, the index may remain vulnerable to selling on rallies.