Domestic equity markets declined sharply on Friday, the final trading session of the week, with the Sensex falling nearly 600 points to an intraday low of 81,620 and the Nifty 50 dropping 200 points, or more than 0.90 percent, to 25,272.
On the BSE, the mid-cap and small-cap indices each declined by around 1 percent. During the session, an estimated Rs 3 lakh crore of investor wealth was eroded.
The decline forms part of a negative trend that has persisted since last week. US tariff orders and global geopolitical developments have weighed on investor sentiment. Investors engaged in large-scale profit booking, increasing selling pressure across the market.
Geopolitical Uncertainty Weighs on Markets
Ongoing nuclear negotiations between the United States and Iran have emerged as a key source of pressure. Recent talks concluded without a final outcome. The United States has stated that Iran should not possess nuclear capability, while uncertainty remains regarding further policy direction and action.
This situation has had a direct impact on crude oil prices and investor confidence. Investors are repositioning portfolios in response to geopolitical risks.
Rising Crude Oil Prices
Amid uncertainty between the United States and Iran, Brent crude prices have moved above $71 per barrel. Market participants are concerned that delays in negotiations could escalate tensions and disrupt supply. As a result, pressure has built in oil and energy-related segments, adding to overall market uncertainty.
Higher oil prices could raise input costs across sectors and affect inflation, contributing to further market declines.
Foreign Investors and Profit Booking
Foreign institutional investors, after extended selling in the market, resumed buying in February. However, they have been engaging in profit booking at intervals. This has had a negative impact on domestic market performance.
Increased activity by foreign investors has contributed to heightened volatility, with smaller investors also experiencing uncertainty.
Banking, Auto and Metal Sectors Lead Declines
Following recent gains, banking, metal, auto and FMCG sectors witnessed substantial profit booking, weighing directly on the Sensex and the Nifty.
In particular, investors sold banking and metal stocks in large volumes to lock in earlier gains. Auto and FMCG stocks also saw selling pressure after prior advances.
Opening Trade
The market had opened with marginal losses. The BSE Sensex opened 28.13 points lower at 82,220.48, while the NSE Nifty 50 began trading 36.70 points lower at 25,459.85.
Despite the modest opening decline, geopolitical tensions and profit booking accelerated losses during the session.
