Benchmark stock market indices trimmed early losses but ultimately ended in negative territory as concerns over escalating global trade tensions continued to weigh on investor sentiment. The S&P BSE Sensex closed 96.01 points lower at 72,989.93, while the NSE Nifty50 dropped 36.65 points to settle at 22,082.65. However, despite the subdued performance of the large-cap indices, there were signs of resilience in the broader market, with the smallcap and midcap segments showing some recovery as the session progressed.
The market opened on a weak note, tracking negative global cues stemming from trade policy concerns, particularly the increasing possibility of higher tariffs and retaliatory measures between major economies. However, domestic institutional buying in selective stocks helped cushion the decline, preventing a steeper fall.
Abhishek Jaiswal, Fund Manager at Finavenue, highlighted that the recent dip in small and midcap stocks was largely due to profit booking after an extended period of strong gains, coupled with uncertainties in global markets. He emphasized that while short-term market fluctuations are inevitable, the underlying fundamentals of well-managed midcap companies remain intact. According to him, these companies continue to be supported by India's strong economic growth, ongoing structural reforms, and positive domestic liquidity conditions. Jaiswal advised investors to focus on fundamentally sound businesses with solid balance sheets and sustainable earnings growth rather than reacting impulsively to market volatility.
Sectoral performance was mixed, with banking and financial stocks showing some resilience while IT, auto, and consumer goods stocks struggled. The Nifty Bank index managed to remain relatively stable, supported by strong performances from SBI and other leading banks. Among the biggest gainers on the Nifty50 were SBI, BPCL, BEL, Shriram Finance, and Adani Enterprises. On the other hand, Bajaj Auto, Hero MotoCorp, Bajaj Finserv, HCLTech, and Eicher Motors were among the biggest losers, weighed down by weak global sentiment, sector-specific concerns, and profit-taking.
Vinod Nair, Head of Research at Geojit Financial Services, noted that while the domestic market showed signs of recovery from the day's lows, it remained under pressure due to unfavorable global cues stemming from trade-related tensions. “The broader market outperformed, primarily driven by value buying opportunities in small-cap stocks. Currently, domestic economic indicators remain favorable, but investors are awaiting clarity on global trade developments for more consistency in market momentum,” Nair explained.
Analysts believe that the near-term outlook for Indian equities will be shaped by a combination of global trade developments, macroeconomic data releases, and foreign institutional investor (FII) activity. With increasing concerns over trade restrictions from the US and European Union, as well as volatility in global commodity prices, investors may adopt a more cautious approach in the coming sessions. However, the overall sentiment remains optimistic for India’s long-term growth prospects, supported by strong domestic consumption, government-led infrastructure spending, and a robust corporate earnings trajectory.
Foreign investors have remained somewhat cautious, with FII outflows observed in recent sessions due to global uncertainty. On the other hand, domestic institutional investors (DIIs) have continued to support the market, indicating sustained confidence in the Indian economy’s fundamentals. The rupee also showed relative stability, despite global currency fluctuations, providing some comfort to investors.
As markets navigate through a period of global uncertainty, experts recommend that investors maintain a diversified portfolio, avoid short-term panic selling, and focus on quality stocks with strong fundamentals. The ongoing shift in market dynamics presents both risks and opportunities, making disciplined investing crucial in the current environment. Traders will also closely watch corporate earnings reports and upcoming policy decisions for further market direction.
In the coming days, investors will keep an eye on key global events, including trade negotiations, inflation data, and central bank decisions, which are likely to influence market sentiment. Additionally, domestic economic indicators such as industrial production and GST collections will provide further insights into the country’s economic health and business confidence.
