Nifty retreats ~2% as profit-booking and FII outflows dent momentum

India’s Nifty index slipped about 2% after a stretch of gains as profit-booking, intermittent foreign institutional investor net selling and thinner liquidity pressured markets. Financials and select large caps led declines while defensive and export-oriented names outperformed. Dealers flagged elevated options-skew and higher implied volatility, advising lower leverage until breadth and participation recover. Short-term support levels cited by brokers were near 25,600–25,300; a clear break could accelerate selling, while stabilisation will rely on renewed domestic buying and positive global cues.