Indian benchmarks fall as geopolitical caution weighs
Indian shares fell on Friday as investors weighed geopolitical risks and awaited GDP data. Most sectors declined despite a slight recovery in IT stocks.
Equity markets in India experienced a downturn on Friday morning as geopolitical concerns and upcoming economic data prompted a widespread selloff. The Nifty 50 index declined by 0.66% to reach 25,328.90, while the BSE Sensex fell 0.56% to 81,788.53. The bearish sentiment was felt across most of the market, with 15 out of 16 major sectoral indices trading in the red. Both broader small-cap and mid-cap indices mirrored the trend, each dropping by 0.8%.
While the information technology sector managed a 0.75% gain on the day, the index remains on track for its most significant monthly decline since the 2008 global financial crisis, having lost approximately 19.1% in February. This downturn has been largely attributed to persistent fears regarding artificial intelligence-led disruptions. The overall market performance for February has been stagnant, with the Nifty rising only 0.1% and the Sensex declining by 0.5% over the month.
Significant pressure on the benchmarks came from major financial and industrial players. HDFC Bank Limited and ICICI Bank Limited both saw their share prices drop by 1%, while RELIANCE INDUSTRIES LTD recorded a 0.5% loss. Market analysts pointed toward international tensions as a primary driver for the current volatility.
There is a cautious undertone in markets due to uncertainties over the next United States course of action regarding Iran, which tempered risk-taking and kept investor sentiment guarded, said Ponmudi R, chief executive of Enrich Money.
Geopolitical developments also influenced energy markets, where oil prices retreated from seven-month highs. This shift followed the extension of nuclear negotiations between Washington and Tehran, which alleviated some immediate concerns regarding potential supply chain disruptions.
In individual stock movements, Vishal Mega Mart Ltd. saw its shares tumble 6.7% following reports that its top shareholder, Samayat Services, intends to divest a portion of its stake. Conversely, MSTC Limited gained 2.2% after being identified as the lowest bidder for a contract offered by Coal India Limited.
Market participants are now shifting their focus toward the release of the December quarter GDP figures for the Indian economy. This particular data set is highly anticipated as it represents the first release under a revised series, which has updated the base year to 2022-23 from the previous 2011-12 standard.
