Mumbai: Indian benchmark stock indices declined sharply during the afternoon trading session on Wednesday. Investors remained cautious due to rising geopolitical tensions in West Asia and continued selling by foreign institutional investors.
The BSE Sensex dropped 1,007 points or 1.29 percent to trade at 77,198. Meanwhile, the NSE Nifty fell 288 points or 1.19 percent to 23,972.
The fall came a day after markets had seen a recovery, indicating that investors are still worried about global uncertainties.
Banking Stocks Lead Market Decline
Selling pressure in major banking and financial stocks pulled the markets lower. Some of the biggest losers on the Sensex included Bajaj Finance, Axis Bank, Mahindra and Mahindra, Bajaj Finserv, Bharti Airtel and HDFC Bank.
These large companies have a strong influence on the index, and their decline contributed significantly to the market fall.
However, a few stocks managed to remain in positive territory. Sun Pharma, NTPC, Adani Ports and Power Grid were among the stocks that traded higher and helped limit the overall losses.
Global Factors Weigh on Sentiment
Experts said global geopolitical tensions, especially in West Asia, are affecting investor confidence. Rising tensions can lead to higher energy prices and disruptions in global trade routes, which creates uncertainty in financial markets.
Ponmudi R, CEO of Enrich Money, said that geopolitical crises often cause volatility in markets. Investors usually move money toward safer assets and reduce investments in riskier markets like equities during such times.
Foreign Investors Continue Selling
Foreign Institutional Investors (FIIs) continued to sell Indian equities. According to exchange data, FIIs sold stocks worth Rs 4,672.64 crore on Tuesday.
Domestic Institutional Investors (DIIs), however, helped provide some support to the market by buying equities worth Rs 6,333.26 crore.
Global Markets Show Mixed Trends
While Indian markets declined, several Asian markets traded higher. South Korea's Kospi and Japan's Nikkei 225 gained more than 1 percent. China's Shanghai SSE Composite and Hong Kong's Hang Seng index also traded in the green.
In the United States, markets ended flat on Tuesday.
Previous Session Performance
In the previous trading session on Tuesday, Indian markets had seen strong gains. The Sensex had risen 639.82 points or 0.82 percent to close at 78,205.98, while the Nifty climbed 233.55 points or 0.97 percent to end at 24,261.60.
However, Wednesday's sharp decline shows that investors remain cautious due to global uncertainties and foreign investor selling.
