Stock Market Slides Ahead of Budget: Sensex Drops Over 500 Points

Indian stock markets opened sharply lower today, reflecting growing caution among investors ahead of the upcoming Union Budget. In early trade around 9:30 am, the S&P BSE Sensex slipped more than 500 points to around 82,050, while the NSE Nifty 50 fell close to 200 points, trading below the 25,300 mark. The sell-off was broad-based, with heavyweights from metal and other cyclical sectors dragging the indices down. Stocks like Tata Steel and Eternal declined nearly 2% each, adding pressure to benchmark indices.

The primary reason behind today’s fall appears to be profit booking. After recent gains, many investors chose to lock in profits and reduce exposure as Budget Day approaches. This kind of cautious behavior is common before major policy events, as traders prefer to wait for clarity rather than take fresh risks. The uncertainty around potential tax changes, fiscal spending plans, and sector-specific announcements has kept sentiment fragile.

Another key factor weighing on the markets is continued selling by foreign institutional investors (FIIs). Persistent FII outflows have been putting pressure on Indian equities for some time now. Global investors remain cautious due to mixed international cues and concerns over interest rates, prompting them to pull money out of emerging markets, including India. This selling has reduced liquidity and made it difficult for markets to sustain upward momentum.

The weakness in the Indian rupee has further dampened investor confidence. A softer rupee against the US dollar raises concerns about inflation, higher import costs, and pressure on corporate margins, especially for companies dependent on imported raw materials. Currency weakness often adds to market volatility, and today was no exception.

Sector-wise, metal stocks faced notable selling pressure, reflecting both global uncertainty and concerns about demand. IT and other rate-sensitive stocks also remained under pressure as traders stayed defensive. Midcap and smallcap stocks largely underperformed the broader market, indicating a clear risk-off mood.

Overall, today’s market decline highlights a wait-and-watch approach among investors. With the Union Budget around the corner, volatility is expected to remain high in the near term. Until there is clarity on policy direction and economic priorities, markets may continue to see short-term corrections driven by cautious sentiment rather than fundamental weakness.

In summary, profit booking ahead of the Budget, ongoing FII selling, and a weakening rupee are the three main reasons why the Sensex and Nifty are under pressure today. Investors are likely to stay selective and defensive until major announcements provide clearer direction for the market.