Key indices in red as investors turn cautious
Snap 2-day rally due to profit booking mainly in banking, oil shares; Investors prefer to stay on sidelines amid escalating tensions between India, Pakistan
Mumbai: Benchmark indices Sensex and Nifty ended lower in a range-bound trade on Tuesday due to profit booking, mainly in banking and oil shares, and investors staying on the sideline amid escalating tensions between India and Pakistan. Snapping its two days of gains, the 30-share BSE Sensex declined 155.77 points or 0.19 per cent to settle at 80,641.07. During the day, it dropped 315.81 points or 0.39 per cent to 80,481.03. The NSE Nifty dipped 81.55 points or 0.33 per cent to 24,379.60.
“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. Meanwhile, 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,” said Vinod Nair, head (research), Geojit Investments Limited.
The BSE smallcap gauge dropped 2.33 per cent and midcap index declined 2.16 per cent.
“Market volatility was further aggravated by escalating geopolitical tensions between India and Pakistan, coupled with uncertainty surrounding the US Federal Reserve’s upcoming interest rate decision,” added Siddhartha Khemka, head (research), Wealth Management, Motilal Oswal Financial Services Ltd.
The trading activity was range bound ahead of the US Federal Reserve’s policy decision and concerns over US-China trade negotiations, analysts said. The Union Home Ministry has directed states and UTs to hold security mock drills in light of the rising Indo-Pak tensions after the Pahalgam terror attack. Close to 300 ‘civil defence districts’ with sensitive installations like nuclear plants, military bases, refineries, and hydroelectric dams will be covered by mock drills on air-raid warning sirens, civilian training for a “hostile attack” and cleaning of bunkers and trenches.
