Indian stocks witness mild profit-booking amid escalated India-Pakistan tensions

MUMBAI: Indian stock markets witnessed profit-booking on Tuesday amid the continued rising geopolitical tensions between India and Pakistan and ended on a negative note. At the end of the trading session today, BSE Sensex was down 155.77 points, or 0.19 per cent, at 80,641.07. The Nifty 50 at the National Stock Exchange (NSE) was down 81.55 points, or 0.33 per cent, at 24,379.60.

The volatility index has increased notably in the last couple of weeks, prompted by increased geopolitical tension between India and Pakistan, up 3.58 at 19 today.

“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.

He said that investors are closely monitoring India’s bilateral trade negotiations with the US. “Additionally, speculation around the US Federal Reserve is drawing attention, as no rate cuts are expected in the near term, affecting global trends”, Nair added.

Observing today’s session, V L A Ambala, co-founder of Stock Market Today said, “Reciprocal tariffs impacted US markets, which also weighed on the Indian market, triggering market flight selling pressure on both the Nifty 50 and the banking index”.

In today’s trading, the second half of the session remained largely range-bound with muted activity. Sectoral performance was broadly negative, 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.

“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 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 almost dropped by 2.5 per cent intraday, reflecting negative sentiments. Notably, the Nifty index has provided almost a 12 per cent gain in recent weeks, which is an unusually strong uptrend for such a short time.

As the week further 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. (ANI)