Profit-booking intensified and investor-sentiment remained cautious on Tuesday amid global trade tensions, and renewed FII fund outflows. FIIS offloaded securities worth more than Rs 1,508 crore on Tuesday, and domestic institutional investors bought securities worth Rs 3,661 crore.

The 30-share BSE Sensex lost 297.07 points to settle at 82,029.98. During the day, it fell 545.43 points at 81,781.62. The 50-share NSE Nifty declined 81.85 points at 25,145.50.

“Mid and small-cap stocks bore the brunt of the sell-off, underperforming large caps while sectoral losses were broad-based. Volatility is expected in the short term; however, the market is expected to remain in a safe zone (medium-term basis), in anticipation of a rise in demand during the second half of FY26,” said Vinod Nair, head of research at Geojit Investments.

“A significant takeaway from the last one year market performance is the outperformance of large caps (Nifty up by 1.05%) and the underperformance of smallcaps (Nifty smallcap index down by 4.77%). Equally significant is the outperformance of PSU banks (Nifty PSU bank index up by 16.77%) and the huge underperformance of IT,” said Dr. VK Vijayakumar, chief investment strategist at Geojit Investments.

“One common feature in these trends is the valuation. IT stocks, particularly the largecaps, are viewed as overvalued by the market since they are facing many headwinds and some strong structural issues,” Dr VKV emphasised.