Sensex Plummets 400 Points from Day's High, Nifty Slips Below 24,150: Market Analysts Weigh in on Causes of Gains Erosion

Indian Markets Pare Gains on May 6 Amid Profit Booking and FII Selling

The Indian stock market benchmarks, Sensex and Nifty, witnessed significant gains being pared on May 6, following a gap-up opening. At 10:30 am, the Sensex was up 242.49 points or 0.31% at 77,260.28, while the Nifty was up 96.05 points or 0.4% at 24,128.85. Approximately 2,280 shares advanced, 1,154 shares declined, and 150 shares remained unchanged.

Key Factors Contributing to the Market's Parity

The markets saw a gap-up opening due to a decline in Brent crude prices, which dropped to $108 a barrel from about $115 earlier in the week. This was attributed to President Trump's announcement to pause "Project Freedom", an operation to escort ships through the Strait of Hormuz, citing "great progress" toward a comprehensive agreement with Iran. However, the markets experienced profit booking as Tehran has not reacted to Trump's comments on the negotiations yet.

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The markets also witnessed foreign investors resuming selling, with foreign portfolio investors (FPI) selling domestic stocks worth Rs 3,622 crore on a net basis on Tuesday, while domestic institutional investors (DII) bought Rs 2,603 crore worth of stocks.

Analysts have noted that for the markets to experience further upside, the Nifty needs to decisively cross 24,250.