Mumbai, May 7,2024:  The domestic indices closed in the red on Tuesday amid massive profit booking.

At close on Tuesday, the Sensex was down 383.69 points, or 0.52 per cent, at 73,511.85, while the Nifty fell 140.20 points, or 0.62 per cent to settle at 22,302.50.

Vinod Nair, Head of Research at Geojit Financial Services, said that despite positive global cues, the domestic markets continued to consolidate. They are witnessing profit booking due to various factors, including a low turnout in the ongoing elections and premium valuations, he said.

Analysts said that a spike in volatility accompanied profit booking.

Hrishikesh Yedve, AVP, Technical and Derivatives Research, at Asit C. Mehta Investment Intermediates, said the domestic indices opened higher on Tuesday, aided by favourable global clues. However, after some initial jitters, the market saw massive profit booking, with the Volatility Index (India VIX) jumping by about 6 per cent.

“Later in the day, the volatility decreased as the Nifty closed at 22,302. Technically, the index created a bearish engulfing candle last week, indicating weakness,” he said.

Analysts said the fall below crucial technical levels suggests that the Nifty’s trend has weakened.

Rupak De, Senior Technical Analyst at LKP Securities, said, “Technically, the trend has weakened as the Nifty fell below the 21-day exponential moving average (EMA). Further selling pressure is anticipated, possibly extending towards 21,980-22,000 in the short term, as long as it remains below 22,400.”