Indian benchmark equity indices, Sensex and Nifty, declined in early trade on Wednesday as global geopolitical tensions remained high even as global markets mirrored weakness while persistent foreign fund outflows dented investor confidence.
The 30-share BSE Sensex dropped 385.82 points to 81,794.65 in opening trade. The 50-share NSE Nifty declined 91.5 points to 25,141.
Market experts said rising bond yields and uncertainty surrounding US trade policies are expected to keep markets in the red.
Ajay Bagga, a banking and market expert, said Indian markets are moving in line with global trends. However, global markets are expected to attempt a recovery while an India-EU trade deal will bolster investor mood.
“We don’t think Trump will follow through on the worst-case scenarios on Greenland. However, markets are worried and factoring in a risk-off scenario with volatility rising as well. Indian markets lack a strong catalyst, though the USD 125-bn India-EU FTA will be a sentiment booster. US markets fell sharply on Tuesday and Asian markets are soft this morning. US yields were up as foreign investors are spooked by Trump’s weaponisation of tariffs on long term allies in Europe,” he said.
On Tuesday, the JGB Liquidity Index reached a record high, reflecting growing stress in the Japanese government bond market. Long-term Japanese bond yields surged, with 30- and 40-year bond rates touching new highs after rising by more than 25 basis points.
The weakness was visible across the broader market as well. The Nifty 100 index was down by 0.36 per cent, the Nifty Midcap 100 declined by 0.32 per cent and the Nifty Smallcap 100 was lower by 0.31 per cent.
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On the sectoral front, most indices on the NSE were trading in the red. Nifty Auto slipped 0.63 per cent, Nifty FMCG fell 0.29 per cent, Nifty IT declined 0.26 per cent and Nifty PSU Bank was down by 0.37 per cent. In contrast, Nifty Pharma gained 0.14 per cent, while Nifty Media was also up by 0.14 per cent.
Meanwhile, several companies are scheduled to report their third-quarter financial performance later in the day, including Eternal, Dr. Reddy’s Laboratories, Hindustan Petroleum Corporation, Bank of India, Waaree Energies, Oracle Financial Services Software, Jindal Stainless, Tata Communications, Supreme Industries, Dalmia Bharat, KEI Industries, and PNB Housing Finance.
“US equity markets closed sharply lower overnight, with the S&P 500 slipping 2 per cent and the Nasdaq plunging close to 2.5 per cent, marking the worst single-day fall since October. The global sell-off was triggered by renewed trade-war concerns after President Trump escalated tariff threats on select European nations opposing US control over Greenland, with proposed duties rising from 10 per cent in February to 25 per cent by June,” Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, said.
From the 30-Sensex firms, Bharat Electronics, ICICI Bank, Trent, Larsen & Toubro, HCL Tech and Infosys were among the laggards. However, Eternal, Sun Pharma, InterGlobe Aviation and Tata Steel were among the gainers.
Foreign institutional investors offloaded equities worth ₹2,938.33 crore on Tuesday, while Domestic Institutional Investors (DIIs) bought stocks worth ₹3,665.69 crore, according to exchange data.
In other Asian markets, Japan’s Nikkei 225 index was down by 0.44 per cent, Singapore’s Straits Times declined 0.32 per cent and Hong Kong’s Hang Seng index slipped 0.08 per cent, further weighing on sentiment.
US markets ended sharply lower on Tuesday. The Nasdaq Composite index tumbled 2.39 per cent, S&P 500 dropped by 2.06 per cent and Dow Jones Industrial Average tanked 1.76 per cent.
Brent crude, the global oil benchmark, dropped 1.11 per cent to USD 64.19 per barrel.
On Tuesday, the 30-share BSE Sensex tumbled 1,065.71 points or 1.28 per cent to settle at 82,180.47. The Nifty tanked 353 points or 1.38 per cent to end at 25,232.50.
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