Indian equity benchmarks extended their decline during midday trading on Tuesday, with heavy selling pressure in select index heavyweights driving the markets deeper into negative territory as investors remained cautious ahead of the third-quarter earnings season.

Market Performance Overview

The benchmark indices showed significant weakness during midday trading with notable declines across key sectors:

Market breadth remained decidedly negative, with 2,396 stocks declining against 1,621 advances on the BSE. A total of 125 stocks hit 52-week highs while 100 touched 52-week lows, with 147 stocks locked in upper circuit and 134 in lower circuit.

Top Stock Movements and Sectoral Performance

The selloff was led by retail major Trent, which emerged as the session's biggest decliner:

Major Decliners

Top Gainers

Sectoral Indices Performance

Sectoral indices displayed mixed movement during the trading session:

The financial services sector showed resilience despite broader market weakness, with banking stocks providing some support to the indices.

Market Opening and Trading Activity

Markets opened on a subdued note, with the Sensex starting at 85,331.14 against its previous close of 85,439.62, while the Nifty opened at 26,189.70 compared with the previous close of 26,250.30. Trading activity has been marked by weekly options expiry-related flows, with investors closely watching developments ahead of the third-quarter earnings season.

The decline represents a continuation of the recent weakness as concerns over potential US tariffs and global uncertainties continue to weigh on investor sentiment, despite positive quarterly business updates from select companies that have maintained hopes of an earnings recovery.

The Indian stock market reached fresh all-time highs on Friday, marking the second trading day of 2026 with strong momentum across benchmark indices. The broader market witnessed significant stock-specific action as traders transitioned from the December futures series to January, carrying forward bullish bets while reducing bearish positions in select counters.

Top Stock Picks Based on Technical Analysis

Technical analysts have identified several stocks showing strong momentum based on open interest changes and price action patterns. The following analysis presents stocks positioned for potential upward movement in the near term.

Breakout Stocks with Strong Technical Setups

UNO Minda emerged as the top pick with a 12.41% increase in open interest alongside a 2.48% price gain. According to Vipin Kumar from Globe Capital Market, the stock broke out of a triangle formation after consolidating since August 2025. The breakout came with notable volume surge and over 12% long addition, suggesting strong bullish sentiment. The stock could move towards ₹1,450 as long as it maintains above ₹1,260 spot level.

Tata Power Company showed a 2.74% price increase despite a marginal 0.84% decline in open interest. Akshay Bhagwat from JM Financial Services noted that the stock has been range-bound between ₹375-410 for eight months. Recent price surge from the ₹373 base with volume support and a positive breakout at ₹384 level indicates potential for revisiting and breaking above ₹410.

Stocks Hitting New Highs

Varun Beverages hit a fresh 52-week high on Friday with increasing open interest and rising prices, indicating strong bullish momentum. Rajesh Palviya from Axis Securities highlighted the transition from previous unwinding to fresh long addition, combined with historically high rollover strength from December series. This suggests the current consolidation phase may precede the next price uptick.

CHOLAFIN made a fresh 52-week high with a 2.93% price gain, despite a 2.80% decline in open interest indicating short covering. The stock witnessed a bullish breakout from a three-month congestion zone, with analysts targeting ₹1,885-1,925 levels.

Large-Cap Momentum Plays

Larsen and Toubro reached a 52-week high through short-covering rally, with significant increase in put intensity showing market participants actively underwriting downside risk. The combination of rising prices, falling open interest, and expanding basis suggests aggressive short sellers are being forced out while higher-conviction holders maintain positions.

JSW Energy showed 1.47% price increase with 3.64% decline in open interest, indicating short covering. The stock has been range-bound between ₹450-550 for eleven months, with an inverse Head and Shoulder pattern formation at ₹450 base setting up for a potential revisit of ₹550+ levels.

Market Outlook

The current market environment reflects strong underlying momentum with selective stock-specific opportunities. The transition from bearish to bullish positioning in derivatives markets, combined with technical breakouts and fresh highs across multiple stocks, suggests continued positive sentiment in the near term. Traders are advised to maintain appropriate stop-loss levels and monitor volume confirmation for sustained moves.