Market Update: Sensex and Nifty Dip Amid Rising Tensions and Profit Booking

Market Performance Overview

Mumbai: On Tuesday, the benchmark indices, Sensex and Nifty, experienced a decline in a volatile trading session, primarily due to profit-taking in banking and oil sectors, as investors remained cautious amid escalating tensions between India and Pakistan.

The BSE Sensex, which had seen two consecutive days of gains, fell by 155.77 points or 0.19 percent, closing at 80,641.07. At one point during the day, it had dropped by 315.81 points, reaching a low of 80,481.03.

Similarly, the NSE Nifty decreased by 81.55 points or 0.33 percent, settling at 24,379.60.

Analysts noted that trading remained constrained ahead of the US Federal Reserve's upcoming policy announcement and ongoing concerns regarding US-China trade discussions.

In response to the rising tensions following the Pahalgam terror incident, the Union Home Ministry has instructed states and Union Territories to conduct mock drills.

These drills will encompass nearly 300 'civil defence districts' that house sensitive facilities, including nuclear power plants, military installations, refineries, and hydroelectric dams. Activities will include air-raid warning siren tests, civilian training for potential hostile attacks, and the maintenance of bunkers and trenches.

Among the major losers on the Sensex were companies like Eternal, Tata Motors, State Bank of India, Adani Ports, NTPC, IndusInd Bank, Bajaj Finance, Asian Paints, Axis Bank, and Sun Pharma.

Conversely, Bharti Airtel, Tata Steel, Mahindra & Mahindra, Hindustan Unilever, Nestle, and Maruti saw gains.

Asian markets showed mixed results, with Shanghai's SSE Composite index and Hong Kong's Hang Seng closing higher, while South Korean and Japanese markets were closed for holidays.

European markets were trading lower, and US markets ended in the red on Monday.

According to exchange data, Foreign Institutional Investors (FIIs) purchased equities worth Rs 497.79 crore on Monday.

The global oil benchmark, Brent crude, surged by 2.76 percent to USD 61.85 per barrel.

"The domestic market has been consolidating in recent sessions following a robust recovery, influenced by cautious sentiment due to India-Pakistan border tensions. Additionally, weak earnings growth for the current quarter has further affected market performance," stated Vinod Nair, Head of Research at Geojit Investments Limited.

"Investors are also closely watching India's trade negotiations with the US. Speculation surrounding the US Federal Reserve's policies is gaining attention, particularly as no rate cuts are anticipated in the near future, impacting global market trends."

In a positive note, India's service sector activity saw a slight uptick in April, driven by an increase in new order inflows, which also supported faster employment growth, according to a monthly survey released on Tuesday.

The seasonally adjusted HSBC India Services PMI Business Activity Index rose to 58.7 in April, up from 58.5 in March, indicating a robust expansion in service sector output.

On Monday, the 30-share BSE benchmark had gained 294.85 points or 0.37 percent, closing at 80,796.84, while the Nifty increased by 114.45 points or 0.47 percent to reach 24,461.15.