Why Are India's Stock Markets Facing a Downward Trend? Insights on Recent Movements
Market Overview
On Wednesday, the benchmark indices of the stock market, Sensex and Nifty, continued their downward trend for the third consecutive day. This decline is attributed to rising geopolitical tensions and renewed worries regarding potential tariff increases in the US, which have negatively impacted investor confidence.
Ongoing foreign fund withdrawals have also contributed to the market's decline.
The BSE Sensex, comprising 30 shares, fell by 102.20 points, or 0.12%, closing at 84,961.14. At one point during the day, it had dropped by 445.85 points, reaching a low of 84,617.49.
Similarly, the NSE Nifty decreased by 37.95 points, or 0.14%, settling at 26,140.75.
Among the 30 companies listed on the Sensex, notable laggards included Maruti, Power Grid, Tata Motors Passenger Vehicles, HDFC Bank, Asian Paints, and Tata Steel.
Conversely, Titan, HCL Tech, Tech Mahindra, Infosys, and Tata Consultancy Services showed gains.
Ponmudi R, CEO of Enrich Money, an online trading and wealth management firm, commented, "The Indian equity markets concluded the session on a cautious note, with investors taking a selective approach due to mixed signals from domestic and global markets. Heightened geopolitical tensions and tariff-related concerns have limited risk appetite and discouraged aggressive investments."
Data from exchanges indicated that foreign institutional investors sold equities worth Rs 107.63 crore on Tuesday, while domestic institutional investors purchased stocks valued at Rs 1,749.35 crore.
Vinod Nair, Head of Research at Geojit Investments Limited, noted, "The sentiment in the domestic market remains cautious, with a risk-off attitude ahead of the Q3 FY26 earnings and crucial US jobs data. Although quarter-on-quarter corporate earnings are anticipated to improve, foreign institutional investors are hesitant due to global trade uncertainties."
In the Asian markets, South Korea's Kospi index and Shanghai's SSE Composite index closed higher, while Japan's Nikkei 225 index and Hong Kong's Hang Seng index ended lower.
European markets were predominantly trading lower.
On the other hand, US markets experienced gains on Tuesday.
Brent crude oil, a global benchmark, saw a decrease of 0.81%, priced at USD 60.21 per barrel.
On the previous day, the Sensex had dropped by 376.28 points, or 0.44%, closing at 85,063.34, while the Nifty fell by 71.60 points, or 0.27%, ending at 26,178.70.