Indian Markets Close Lower for Second Day Amid Valuation Concerns and Global Uncertainty
Mumbai | May 28, 2025 — The Indian stock market witnessed its second consecutive day of decline on Wednesday, weighed down by premium valuations and mixed global signals, even as domestic cues remain moderately supportive. Both benchmark indices — the Sensex and Nifty — ended in the red, dragged primarily by losses in FMCG and sectoral indices.
Sensex Drops by 239 Points, Nifty Falls Below 24,800
The BSE Sensex slipped 239.31 points, or 0.29%, to close at 81,312.32, while the NSE Nifty50 declined 73.75 points, or 0.30%, settling at 24,752.45. The broader market sentiment remained cautious throughout the session, reflecting global hesitation and persistent valuation pressure in domestic equities.
FMCG, Pharma, and Auto Stocks Lead Declines
The Nifty FMCG index was the worst performer among sectoral indices, falling 1.50%, with stocks like Hindustan Unilever and ITC under pressure. Weakness was also seen in the Auto, Pharma, Metal, Realty, Infra, Commodity, and Healthcare sectors, all of which closed in negative territory.
In contrast, midcaps and smallcaps showed resilience. The Nifty Midcap 100 ended marginally lower by 13 points at 57,141, while the Nifty Smallcap 100 gained 58 points (0.33%) to settle at 17,784.
FIIs Missing, Valuations Stretched: Analysts Warn of Rangebound Trade
Market analysts pointed to the absence of foreign institutional investor (FII) support and elevated market valuations as key reasons behind the cautious sentiment. According to Vinod Nair, Head of Research at Geojit Financial Services, despite positive domestic cues like a better monsoon outlook and controlled inflation, earnings visibility remains a concern.
“The market is struggling to find direction as macros remain positive, but corporate earnings momentum hasn’t caught up. Until there is clarity on earnings growth, we expect rangebound movement with downside risk,” Nair said.
Technical View: Key Support at 24,570, Resistance at 25,100
From a technical standpoint, the Nifty index formed a red candle on daily charts, reflecting selling pressure. However, the index continues to trade above its 21-day Exponential Moving Average (21-DEMA), which currently lies around 24,570.
“As long as Nifty holds above 24,570, chances of a short-term pullback remain. Resistance is expected in the 25,000–25,100 zone,” said Hrishikesh Yedve, Technical Analyst at Asit C. Mehta Investment Intermediates Ltd (Pantomath Group).
India VIX Drops, Suggesting Cooling Volatility
Market volatility eased, with the India VIX declining 2.79% to 18.02, indicating reduced fear levels among investors despite the current consolidation.
Currency and Commodity Watch: Rupee Flat, Gold Shines
The Indian rupee traded flat around ₹85.40 against the US dollar, tracking a steady Dollar Index near 99.45. Market participants remained cautious ahead of key global data releases, including US Fed meeting minutes, Q4 GDP figures, and the Core PCE Price Index.
“The rupee’s trajectory will be influenced by foreign fund inflows and how global cues shape up later this week,” said Jateen Trivedi, Research Analyst at LKP Securities.
On the commodities front, gold prices gained support from global uncertainty, with Comex gold finding strong buying interest in the $3,280–$3,300 zone. Domestically, MCX gold climbed by ₹600, finding support near the ₹95,000 level, as safe-haven demand persisted.
Key Highlights:
- Sensex closed at 81,312.32, down 239 points
- Nifty ended at 24,752.45, slipping 73.75 points
- FMCG, Auto, and Pharma stocks drag indices lower
- Midcap-flat, Smallcap outperformed
- India VIX dropped to 18.02, indicating lower volatility
- Rupee stable around ₹85.40; Gold prices firm up
Outlook
As India heads into a week packed with both domestic and international economic cues, analysts believe that the markets are likely to remain rangebound with a negative bias unless there is a strong trigger — either in the form of earnings surprises or global relief.
With elections out of the way and monsoon forecasts turning favorable, investors will now look toward corporate performance and policy signals in the upcoming budget session to gauge the next leg of market momentum.