Indices decline over 1% amid Covid-19 surge and foreign inflow concerns

Mumbai: India's benchmarks declined over 1% on Tuesday as uncertainty over the near-term market prospects prompted traders to cut some of their bullish bets after the recent run up. Concerns over ebbing foreign inflows and a recent surge in Covid-19 cases in India and Asia contributed to the cautious sentiment.

NSE's Nifty fell 261.55 points, or 1.05%, to close at 24,683.9. BSE's Sensex declined 872.98 points, or 1.06%, to end at 81,186.44.

"The market has failed to hold above the 25,000 level despite consistent efforts, as traders are now booking profits post the recent rally in the indices from April's lows," said Chandan Taparia, head of technical and derivatives research at Motilal Oswal Financial Services. "The surge in Covid cases has also been sentimentally negative for the market."

Taparia also said traders were adding fresh short positions in Nifty and Bank Nifty for both weekly and monthly expiries, which suggests that upside may be capped in the near term.