Key Points:
- Indian stock market slipped from record highs as profit booking and weakness in IT stocks dragged key indices lower.
- IT shares underperformed due to global demand concerns and ongoing trade and geopolitical uncertainty.
- Select sectors like real estate and consumer stocks gained, but rising volatility and a weaker rupee kept sentiment cautious.
The Indian stock market retreated on Monday after touching record highs, with profit booking and declines in heavyweight IT stocks weighing on sentiment as analysts pointed to global developments and trade uncertainty.
Benchmarks Slip After Touching Fresh Highs
Equity markets in the Indian stock market surrendered early gains to close lower, extending a pause after recent rallies. The Sensex fell 322.39 points, or 0.38 percent, to end at 85,439.62, while the Nifty declined 78.25 points, or 0.30 percent, to settle at 26,250.30.
The Nifty opened at 26,333.70 and rose to a record high of 26,373 before selling pressure intensified through the session, pulling the index to an intraday low of 26,210. The Sensex opened at 85,640.05 compared with its previous close of 85,762.01.
“Markets touched new lifetime highs but saw selling from higher levels as investors turned selective,” Ashika Institutional Equities said in a note. It added that profit-taking emerged near resistance levels after the recent rally.
The decline followed several sessions of gains that had lifted benchmarks in the Indian stock market to historic levels, prompting investors to reassess valuations, analysts said.
IT Stocks Underperform as Analysts Flag Overseas Risks
Information technology shares led losses in the Indian stock market, reflecting sector-specific pressures. Infosys fell 2.03 percent to close at 1,607.10 rupees, while HCL Technologies declined 1.85 percent to 1,609.80 rupees. Wipro dropped 1.71 percent to 264.40 rupees.
The Nifty IT index fell more than 1.5 percent, making it the weakest sectoral performer. HDFC Bank declined 1.87 percent, while ONGC fell 1.62 percent, adding to benchmark pressure.
“Losses were led by IT heavyweights amid cautious brokerage commentary and concerns around external demand,” said Gaurav Garg, a research analyst at Lemonn Markets Desk. He added that uncertainty around global trade policy remained a factor that investors were monitoring.
Analysts also pointed to reports of heightened geopolitical developments abroad as contributing to cautious sentiment. Over the weekend, the United States confirmed military operations in Venezuela, an action that has drawn varied international responses.
India’s government said it was “deeply concerned” and called for restraint and dialogue, while some international experts and United Nations officials have raised questions about the legality of the strikes. U.S. officials have defended the action, citing security and anti-narcotics objectives.
Market participants said such developments can influence short-term risk appetite, though they emphasized the absence of direct economic spillovers so far.
Select Sectors Gain; Volatility and Currency Pressure Persist
Despite broader weakness, select sectors posted gains in the Indian stock market. Bharat Electronics rose 3.03 percent to 415.35 rupees, becoming the top Nifty gainer. Nestle India gained 2.66 percent, while Eicher Motors, Maruti Suzuki and Axis Bank advanced more than 1.5 percent each.
Real estate shares outperformed, with the Nifty Realty index rising 2.1 percent following positive business updates. Consumer durables gained 1.1 percent.
Broader markets were mixed. The Nifty Midcap 100 slipped 0.16 percent, while the Nifty Smallcap 100 gained 0.53 percent. The Nifty Bank fell 0.18 percent after touching a fresh all-time high earlier in the session.
Market breadth remained negative on the BSE, with declining stocks outnumbering advances. Volatility increased, with India VIX rising 6.06 percent to 10.02.
The rupee weakened for the ninth time in 10 sessions, amid foreign fund outflows and trade-related uncertainty. Gold prices climbed sharply, supported by global demand ahead of key U.S. economic data releases.
“External developments may continue to influence near-term sentiment, but domestic fundamentals remain in focus,” said Siddhartha Khemka, head of research at Motilal Oswal Financial Services.
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