Mumbai, Dec 2 (NationPress) The Indian equity markets faced a downturn on Tuesday due to profit booking, substantial FII outflows, and apprehensions surrounding the RBI's upcoming policy meeting this week.

The Sensex closed at 85,138.27, reflecting a drop of 503.63 points or 0.59 percent. The 30-share index commenced the day lower at 85,325.51 compared to the previous session's close of 85,641.90. The index further declined amid selling pressure predominantly in the banking and IT sectors, hitting an intra-day low of 85,053.0.

The Nifty concluded at 26,032.20, down 143.55 points or 0.55 percent.

According to analysts, domestic markets have been experiencing profit-taking due to concerns over a weakening rupee and ongoing FII outflows. Additionally, the recent changes in the NSE’s sectoral indices, in accordance with SEBI regulations, have resulted in adjustments in major banking stocks.

In the short term, diminishing hopes for an RBI rate cut, driven by robust GDP data coupled with uncertainties surrounding US-India trade talks, might keep investors cautious, the analysts noted.

Within the Sensex constituents, stocks such as ICICI Bank, Axis Bank, HDFC Bank, BEL, L&T, PowerGrid, Bajaj FinServ, Mahindra & Mahindra, ITC, Tata Motors PV, and HCL Tech closed in the negative zone. Conversely, Asian Paints, Bharti Airtel, Maruti Suzuki, Bajaj Finance, and Hindustan Unilever showed gains.

Most sectoral indices traded lower amid selling pressure. The Nifty Fin Services fell by 249 points or 0.10 percent, Nifty Bank decreased by 407 points or 0.68 percent, Nifty Auto dipped 13 points or 0.05 percent, and Nifty FMCG closed 109 points or 0.20 percent lower.

Siddhartha Khemka, Head of Research at Wealth Management, Motilal Oswal Financial Services Ltd stated that most sectors closed lower, with private banks and financial services leading the declines, down 0.7 and 0.8 percent respectively. In contrast, the PSU Bank index rose by 0.5 percent, marking its second consecutive day of gains.

Rate-sensitive sectors, including Auto, Realty, and Consumer Durables, experienced profit booking amid cautious market sentiment. However, the monthly auto volumes for November surpassed market expectations, with wholesale figures indicating robust post-festive growth across various segments, supported by festive order backlogs and inventory normalization, Khemka added.

Broader indices followed the downward trend as well. The Nifty Smallcap 100 dropped by 98 points or 0.55 percent, the Nifty Midcap 100 fell by 132 points or 0.22 percent, while the Nifty 100 ended the trading session 126 points or 0.47 percent higher.