Indian Stock Market Falls as Nifty50 and Sensex Slip; Analysts Remain Cautiously Optimistic
On Tuesday, Indian equity markets witnessed a sharp decline, with both the Nifty50 and BSE Sensex trading in the red. By 10:16 AM, the Nifty50 index dropped 246 points or 0.98%, standing at 24,754.95, while the BSE Sensex declined 855 points or 1.04%, hovering around 81,321.75.
Despite the current volatility, market experts maintain a cautiously optimistic view. They expect the Indian markets to maintain upward momentum in the medium to long term, backed by strong domestic economic fundamentals and positive global cues.
A gradual accumulation in interest rate-sensitive sectors like automotive stocks, reflecting investor anticipation of further rate cuts driven by a declining inflation trend. Additionally, Systematic Investment Plan (SIP) flows have shown greater resilience, with investors now opting for longer-term holdings, offering ongoing market support.
Meanwhile, Asian markets opened cautiously, reflecting global uncertainty over trade developments that may influence sentiment around U.S. assets. The U.S. Dollar remained under pressure as investors evaluated the potential impact of President Trump’s extensive tax and spending legislation on the U.S. fiscal deficit and long-term debt outlook.
As a result, gold prices rose on Tuesday, benefiting from the weaker dollar and fiscal uncertainty in the U.S. Market participants are also closely watching future trade decisions, especially after Trump postponed tariff hikes on European imports.
From a capital flow perspective, foreign portfolio investors (FPIs) made net equity purchases worth ₹136 crore on Friday, while domestic institutional investors (DIIs) bought ₹1,746 crore. Additionally, net short positions held by foreign institutional investors (FIIs) in futures contracts dropped from ₹54,197 crore on Friday to ₹51,312 crore on Monday, signaling a reduction in bearish sentiment.
