Indian Indices Slip After Rally Amid Geopolitical Calm

Indian stock indices took a downward turn on Tuesday, closing in the red after a day of impressive gains following Monday's exhilarating rally. The rally had been fueled by the easing of tensions between India and Pakistan, with both nations' armed forces reaching an understanding to de-escalate conflicts.

At the close of the trading session, the BSE Sensex plunged 1,281.68 points, or 1.55%, taking it to 81,148.22, while the Nifty dropped 346.35 points, or 1.39%, settling at 24,578.35. On the BSE, the midcap index hovered near the flatline, but the smallcap index saw a gain of 1%.

Vinod Nair, Head of Research at Geojit Investments Limited, commented on the market's behavior, citing today's profit booking as a pause from Monday's sharp rally driven by the softening global and domestic risks, including reduced trade war tensions and Indo-Pak geopolitical strife. Nair noted that while large-cap stocks are consolidating, mid- and small-cap stocks are seeing increased interest.

The market divergence is expected to persist as earnings improvements become apparent in Q4 results, Nair added. Sundar Kewat, a technical and derivatives analyst with Ashika Institutional Equity, remarked that geopolitical tensions remain a focus as investors eyed the fragile ceasefire between India and Pakistan, which contributed to the market's cautious tone.

Looking ahead, market experts see growing optimism for FY26 earnings growth. This is bolstered by fiscal and monetary policies, improved external demand, favorable monsoon predictions, and decreasing inflation and interest rates. Early Tuesday, the Nifty opened slightly lower at 24,864, peaked at 24,973, then plunged to a daily low of 24,560, hovering near that level by day's end.

Sector-wise, performance varied. PSU banks, media, and pharmaceuticals showed resilience, while IT, auto, consumer goods, and real estate sectors pulled the index down. (ANI)

(With inputs from agencies.)