Amid the ongoing tensions between India and Pakistan, India stock markets have remained volatile, although they witnessed profit-booking on Tuesday before ending on a negative note. The State Bank of India (SBI) said in a report that it expected the India rupee to remain stable in the range of Rs. 85-87 against the US Dollar this year.
At the end of the trading session today, BSE Sensex was down 155.77 points or 0.19 per cent at 80,641.07, while Nifty 50 was down 81.55 points or 0.33 per cent at 24,379.60 at the National Stock Exchange (NSE).
While investors are closely monitoring India’s bilateral trade negotiations with the US, reciprocal tariffs, which have affected US markets, have also weighed on the Indian market and triggered market flight. With the US Federal Reserve not expected to make any rate cuts, global trends will further experience changes.
“Market sentiment remained cautious as rising geopolitical tensions between India and Pakistan led investors to adopt a defensive approach, overshadowing support from select pockets of the market,” said Sundar Kewat, Technical and Derivatives Analyst, Ashika Institutional Equity.
“The domestic market has been consolidating in recent sessions following the strong recovery, driven by cautious sentiment amid India-Pakistan border tensions. Weak earnings growth for the current quarter has further impacted the market. Small- and mid-cap stocks have underperformed compared to benchmark indices,” said Vinod Nair, Head of Research, Geojit Investments Limited.
Sectoral performance was broadly negative today, with the automobile sector being the sole gainer, while PSU Banks, Realty, Media, Oil & Gas, and Financial Services bore the brunt of the selling pressure. The banking index was under more pressure due to concerns over the government potentially offloading its stake in PSU banks. As a result, the PSU sector dropped by 2.5 per cent intraday, reflecting negative sentiments. Notably, the Nifty index has provided a 12 per cent gain in recent weeks, which is an unusually strong uptrend for such a short time.
As the week progresses, Indian stock markets will closely monitor the movement of foreign portfolio investments (FPI), which have recently turned net buyers, along with developments on the India-US bilateral trade deal front, and the Q4 earnings of key listed companies for fresh cues.
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