Source : INDIA TODAY NEWS
Benchmark indices ended sharply lower on Monday as weakness in banking and heavyweight stocks outweighed a strong rally in information technology (IT) shares amid rising geopolitical concerns and investor caution ahead of key domestic events.
The BSE Sensex fell 508.40 points, or 0.68%, to close at 74,267.34, while the NSE Nifty50 declined 165.15 points, or 0.70%, to settle at 23,382.60.
The broader market remained under pressure despite a strong performance from IT stocks, which emerged as the day’s biggest gainers. The Nifty IT index surged nearly 4%, led by Infosys, Tech Mahindra, Coforge, Persistent Systems and LTIMindtree.
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Infosys gained more than 4%, while Tech Mahindra rose nearly 5% as investors bet on improving technology spending and the possibility of US Federal Reserve rate cuts later this year.
However, gains in technology counters were offset by selling across several other sectors, particularly financials and index heavyweights, dragging the benchmarks into negative territory.
Market sentiment remained cautious amid escalating tensions in West Asia and uncertainty surrounding global economic conditions. Investors also preferred to stay on the sidelines ahead of the Reserve Bank of India’s monetary policy decision later this week and the release of key GDP data.
Vinod Nair, Head of Research at Geojit Investments Limited, said geopolitical developments continued to weigh on investor sentiment.
“Recent US strikes and the escalation in cross-border hostilities between Israel and Lebanon have exerted selling pressure on equity markets, reflecting heightened geopolitical uncertainty and a shift towards risk-off sentiment. However, as the conflict has now entered its fourth month, participants are increasingly anticipating potential diplomatic progress in the near term,” he said.
Nair added that the resumption of India-US trade talks could provide support to markets going forward.
“On the domestic front, the resumption of India–US trade negotiations, with a focus on an interim trade agreement, could act as a supportive trigger for market sentiment going forward,” he said.
According to Nair, investors also shifted towards the relative safety of large-cap stocks amid uncertainty.
“The Nifty Mid and Smallcap underperformed, as investors moved towards relatively better-valued opportunities in large-cap equities, seeking stability amid global uncertainties,” he said.
Despite Monday’s decline in the benchmark indices, analysts noted that the strong rally in IT stocks reflects selective buying in sectors expected to benefit from easing monetary conditions globally and a recovery in corporate technology spending.
With the RBI policy decision and domestic macroeconomic data due later this week, investors are likely to remain focused on policy signals and growth indicators for cues on the market’s next direction.
– Ends
SOURCE :- TIMES OF INDIA
