Indian markets slid on Friday as investors exercised caution amid growing geopolitical tensions following Tuesday’s terror attack in Kashmir. Wiping out all early gains, the Nifty 50 declined 0.86 per cent to 24039.35. The BSE Sensex could not hold on to the day’s high of 80130.66 and closed 0.74 per cent down at 79212.53.
“Markets closed on a weak note despite opening higher as investor sentiment was hit by the ongoing uncertainty over India-Pakistan relations after terror attacks in Kashmir. The volatility index — India Vix — which gauges investor fear in the market, was up 6 per cent on Friday,” said Vinay Rajani, senior technical and derivative research analyst, HDFC Securities.
The broader market witnessed sharp cuts as the Nifty Midcap 100 and Smallcap indices nosedived 2.55 per cent and 2.45 per cent, respectively. Market breadth remained negative for the second consecutive session with the BSE advance-decline ratio at 0.22, indicating that declining stocks outnumbered advancing ones, said Rajani.
Among Sensex shares, Adani Ports, Axis Bank, Eternal, Bajaj Finserv, PowerGrid, Maruti, Bajaj Finance, Tata Motors, Tata Steel and NTPC were the biggest laggards.
However, IT firms such as TCS, Infosys, Tech Mahindra along with UltraTech Cement, IndusInd, Hind Unilever and ICICI Bank were gainers as investors took fresh positions. “Despite the weakness, IT stocks stood resilient, outperforming as defensives found favour,” said Vikram Kasat, head - advisory, PL Capital.
“Investor sentiment turned cautious amid escalating tensions along the Indo-Pak border. Mid and smallcap stocks bore the brunt of the sell-off, driven by their elevated valuations and growing concerns over potential earnings downgrades following a muted start to the earnings season,” said Vinod Nair, head of research of Geojit Investments Limited.
“In the last few days, Nifty has also revived to 24000 points with FII buying, banking stocks rally, and expectations of a positive outcome from the US-India trade talks. Along with the geopolitical tensions, profit-booking by investors also added to today’s market drop,” said Ajay Garg, CEO, SMC Global Securities.
India’s benchmark indices were among the worst performers within the Asian peers. South Korea’s Kospi index, Tokyo’s Nikkei 225 and Hong Kong’s Hang Seng settled in the positive territory. Shanghai SSE Composite ended marginally lower.
Markets in Europe were trading higher, while US markets ended significantly higher on Thursday.
Foreign Institutional Investors bought equities worth ₹8,250.53 crore on Thursday. Brent crude declined 0.50 per cent to $66.24 a barrel.
