Sensex Drops Over 1,200 Points After Record Rally, But Experts Say No Need to Panic
The Indian stock market saw a sharp correction on Tuesday as the Sensex plunged over 1,200 points in early trade, pulling back from Monday’s historic rally. The Nifty also slipped into the red as investors booked profits after the market’s strong one-day surge.
On Monday, both Sensex and Nifty had registered their biggest-ever single-day point gains, with each index soaring nearly 4%. This remarkable rally was driven largely by improved investor sentiment following news of a ceasefire agreement between India and Pakistan. The gains added a massive ₹16.15 lakh crore to the total market capitalisation of companies listed on the Bombay Stock Exchange (BSE), pushing it to ₹4,32,56,125.65 crore.
However, on Tuesday, the momentum eased. With the rally priced in, many investors opted to lock in profits, leading to the decline. Despite the steep fall, market experts say the correction was not only expected but also healthy for the market’s long-term sustainability.
Not a Red Flag, Say Experts
Trivesh, COO of Tradejini, said the dip should not worry long-term investors. “The rally has legs, and this time it feels broader—not just a handful of large-caps driving it,” he noted. While the ceasefire may have been a trigger, he emphasized that the real drivers are more structural: strong domestic inflows, improving sectoral participation, and sustained breakout levels.
He also pointed to continued institutional buying as a sign of confidence. “FIIs (Foreign Institutional Investors) have invested nearly ₹7,800 crore this month, and DIIs (Domestic Institutional Investors) have added about ₹13,700 crore until May 9,” Trivesh said.
Highlighting potential opportunities, he added, “Defence, pharma, and broader mid- and small-cap participation show this is not just a headline-driven rally. Investors with a 3–5 year horizon should remain invested and even consider adding on dips. Stick to quality, follow a disciplined plan, and let the trend play out.”
A Strategic Pause
Manoj Trivedi, Director of Strategy at Maxiom Wealth, echoed similar views, stating that this correction is no reason for panic. “We expect strong performance from sectors like Banking, Financial Services, Defence, Engineering, Infrastructure, and selected IT names. Volatility is part of market cycles, and investors should remain committed to their strategy,” he said.
He emphasized the importance of asset allocation and planning. “Periodic portfolio rebalancing and disciplined investing can help investors ride out short-term noise. Selling due to panic often does more harm than good. Staying invested with a long-term view is key,” Trivedi added.
Technical Picture Still Bullish
From a technical standpoint, analysts at Way2Wealth Brokers noted that the Nifty remains strong. “Most technical indicators continue to show bullishness. The current support zone is between 24,900–24,800, while resistance is around 25,000–25,200. We recommend a buy-on-dips strategy for traders targeting a rebound,” the brokerage said.
The Bottom Line
While Tuesday’s drop may have unsettled some investors, experts urge calm and patience. The market’s broader trend remains intact, and corrections like these are a normal part of healthy market behavior. Investors are advised to stay focused on long-term goals, maintain disciplined investment strategies, and avoid making emotional decisions during short-term volatility.
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(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the IndianDailyPost Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)
