Mumbai, May 6 – Domestic equity markets closed lower on Tuesday as heightened geopolitical tensions between India and Pakistan coupled with profit booking in banking and oil stocks prompted investors to adopt a cautious stance. The benchmark Sensex declined by 156 points, while the Nifty slipped by 82 points.
As per agency report, the BSE Sensex ended its two-day winning streak and closed at 80,641.07, down by 155.77 points or 0.19 percent. During intraday trade, it fell by as much as 315.81 points, touching a low of 80,481.03. The NSE Nifty also retreated, ending the session 81.55 points lower at 24,379.60, a decline of 0.33 percent.
Investor sentiment was dampened by the growing tensions on the India-Pakistan border following the recent terrorist attack in Pahalgam. The Ministry of Home Affairs has directed states and union territories to conduct large-scale mock drills in nearly 300 civil defense districts, focusing on emergency preparedness at sensitive facilities such as nuclear plants, military bases, refineries, and hydroelectric dams.
The looming uncertainty ahead of the US Federal Reserve’s upcoming policy decision and concerns surrounding US-China trade talks also restricted market activity within a narrow range.
Among the Sensex constituents, shares of Eternal (formerly Zomato), Tata Motors, State Bank of India, Adani Ports, NTPC, IndusInd Bank, Bajaj Finance, Asian Paints, Axis Bank, and Sun Pharma were the major laggards. On the other hand, stocks of Bharti Airtel, Tata Steel, Mahindra & Mahindra, Hindustan Unilever, Nestle, and Maruti Suzuki posted gains.
Vinod Nair, Head of Research at Geojit Financial Services, commented that the domestic markets were impacted by cautious investor sentiment triggered by escalating border tensions and underwhelming earnings reports for the current quarter. He also noted that investors are closely watching bilateral trade negotiations between India and the US, along with the US Fed’s interest rate stance, which appears unlikely to soften in the near term.
Siddharth Khemka, Head of Research (Wealth Management) at Motilal Oswal Financial Services, added that the uncertainty regarding the Fed's decision and the geopolitical friction contributed to heightened market volatility.
According to a monthly survey released on Tuesday, India’s services sector activity showed modest improvement in April, supported by a steady rise in new orders and robust job creation.
The broader market mirrored the cautious tone, with the BSE Midcap index dropping 2.16 percent and the Smallcap index falling 2.33 percent.
Asian markets ended mixed, with China's Shanghai Composite and Hong Kong’s Hang Seng closing in the green. South Korean and Japanese markets remained shut for public holidays. European markets were trading lower during the afternoon session, and US markets had closed in the red on Monday.
Foreign institutional investors (FIIs) were net buyers, purchasing shares worth Rs 497.79 crore on Monday, according to exchange data.
Meanwhile, Brent crude, the global oil benchmark, surged by 2.76 percent to reach $61.85 per barrel.
On Monday, the Sensex had closed 294.85 points higher at 80,796.84, and the Nifty had gained 114.45 points to end at 24,461.15.
