What’s Driving the Decline in Indian Stock Markets? Insights on Sensex and Nifty
Market Overview
Mumbai: The equity benchmark indices, Sensex and Nifty, experienced a downturn on Tuesday following a brief respite, influenced by ongoing foreign fund withdrawals and a sell-off in blue-chip stocks amid concerns over global tariffs.
Traders noted that market sentiment was dampened by a lackluster start to the earnings season.
In a day marked by volatility, the 30-share BSE Sensex fell by 250.48 points, or 0.30 percent, closing at 83,627.69. At one point, it had dropped by 615.38 points, or 0.73 percent, to reach 83,262.79.
The 50-share NSE Nifty also declined, losing 57.95 points or 0.22 percent, settling at 25,732.30.
Among the 30 companies listed on the Sensex, major laggards included Trent, Larsen & Toubro, Reliance Industries, InterGlobe Aviation, Maruti, ITC, Adani Ports, and Bharat Electronics.
Conversely, stocks such as Eternal, ICICI Bank, Tech Mahindra, State Bank of India, and Tata Consultancy Services showed gains.
TCS, the largest IT services exporter in India, reported a significant 13.91 percent decline in profits for the December quarter, amounting to Rs 10,657 crore, largely due to the impact of new labor regulations.
Additionally, retail inflation surged to a three-month high of 1.33 percent in December, driven primarily by rising food prices, although it remained below the Reserve Bank of India's lower tolerance threshold.
Foreign institutional investors sold equities worth Rs 3,638.40 crore on Monday, while domestic institutional investors purchased stocks totaling Rs 5,839.32 crore, as per exchange data.
In a related development, US President Donald Trump declared that any nation engaging in trade with Iran would incur a 25 percent tariff on its transactions with the United States, a move that could affect major trading partners like India, China, and the UAE.
"Effective immediately, any country doing business with the Islamic Republic of Iran will pay a Tariff of 25 percent on any and all business being done with the United States of America. This order is final and conclusive," Trump stated on Truth Social.
"Indian equity markets experienced significant intra-day fluctuations on the weekly expiry, with initial gains giving way to profit-taking as the session unfolded. The early optimism was overshadowed by global tariff concerns, mixed responses to Q3 earnings, and the typical expiry-driven volatility," commented Ponmudi R, CEO of Enrich Money, a trading and wealth technology firm.
In Asian markets, South Korea's Kospi index, Japan's Nikkei 225 index, and Hong Kong's Hang Seng index closed higher, while Shanghai's SSE Composite index ended lower, with the Nikkei 225 index surging over 3 percent.
European markets displayed mixed trading patterns.
US markets concluded the day positively on Monday.
Brent crude, the global oil benchmark, rose by 1.86 percent to USD 65.06 per barrel.
On Monday, the Sensex had gained 301.93 points or 0.36 percent, closing at 83,878.17, while the Nifty increased by 106.95 points or 0.42 percent to 25,790.25.