The Sensex fell more than 700 points in early trade on Tuesday, mirroring losses in index heavyweights Infosys, ICICI Bank, and Reliance Industries, as foreign money outflows continued.

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Following a low of 57,718.34 in the opening session, the 30-share index recovered some ground to trade 264.20 points, or 0.45%, down at 58,201.69.

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Similarly, the Nifty was trading at 17,327.50, down 89.05 points or 0.51%. In the first round of trading, it fell to a low of 17,216.10.

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Infosys was the Sensex pack’s biggest loss, losing roughly 2%, followed by ICICI Bank, HUL, Bajaj Auto, Reliance Industries, and TCS. On the other hand, Tata Steel, PowerGrid, Bajaj Finance, and ITC were among the gainers.

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In the previous session, the Sensex sank 1,170.12 points, or 1.96%, to 58,465.89, while the Nifty dropped 348.25 points, or 1.96%, to 17,416.55.

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According to exchange statistics, foreign institutional investors (FIIs) were net sellers in the capital market on Monday, offloading shares worth Rs 3,438.76 crore.

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“The market heavyweight RIL re-evaluating the Aramco deal, Paytm’s disastrous listing, the resurgence of COVID in parts of Europe, RBI’s warning of stretched valuations, foreign brokerages downgrading India and the rollback of farm laws created the perfect storm that spooked the market,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

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This is a much-needed correction that will make the market healthy, he said, adding that Paytm’s fiasco is a reality check on the froth in the primary market and will restrain the irrationally exuberant newbie investors.

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“While Nifty has corrected 6.4% from the peak, Nifty Bank has corrected 12.4% from the peak indicating weakness in the banking sector even though valuations are not stretched in banking.

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“Sustained selling by FIIs will continue to be a negative sentiment in the market. The retail investor response to the correction should be watched,” he stated.

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In other Asian markets, Hong Kong and Seoul were trading with losses in mid-session trades, while Shanghai and Tokyo were up. In the overnight session, stock markets in the United States ended substantially in the red.

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Meanwhile, the international oil benchmark Brent crude dropped 0.45% to USD 79.34 per barrel. In early trade, the rupee falls 11 paise to 74.50 against the US dollar.