Domestic equity indices in Mumbai witnessed a continuous decline for the fourth consecutive session on Wednesday, fueled by growing uncertainty surrounding the United States’ economic stance towards India. The NSE Nifty fell by 112 points, or 0.45%, closing at 25,056, while the BSE Sensex witnessed a drop of 386 points, or 0.5%, ending the day at 81,715. Over the past few sessions, both benchmarks have recorded losses of 1.4% and 1.6%, respectively, reflecting a cautious market sentiment.
Market analysts point to the recent announcement regarding H-1B visa applications as a significant factor contributing to the current bearish trend. Pankaj Pandey, head of fundamental research at ICICI Direct, indicated that while tier-1 companies may only experience a profit impact of 1-2%, the overall sentiment has soured, prompting investors to take profits. This sentiment shift came in the wake of former President Donald Trump’s announcement imposing a $100,000 levy on new H-1B visa applications, a move anticipated to adversely affect Indian information technology firms.
Amid this environment, foreign portfolio investors engaged in net selling of shares amounting to ₹2,425.7 crore, contrasting with domestic institutional investors who were net buyers worth ₹1,211.7 crore.
Despite the bearish trend, there are glimmers of optimism for market participants. Ruchit Jain, vice-president at Motilal Oswal Financial Services, noted that the Nifty index rallied significantly from 24,400 to 25,400 within a span of three weeks, driven by strong GDP figures and a cut in GST rates, but this surge pushed momentum indicators into an overbought position. Jain suggested that the current market dip presents potential buying opportunities for positional traders and long-term investors. He highlighted key levels for the Nifty, with support expected between 24,500–24,800 and resistance near 25,500, suggesting a range-bound trading outlook in the near term.
In terms of market volatility, the Nifty Volatility Index, often referred to as the market’s fear gauge, dipped by 1% to settle at 10.52 on Wednesday. The broader market mirrored the downward trend, with the Nifty Midcap 150 declining by 0.9% and the Nifty Small-cap 250 slipping 0.6%. Of the 4,320 stocks traded on the BSE, 1,540 gained ground while 2,651 faced declines.
In international markets, Asian indices displayed mixed results; Japan rose by 0.3%, China gained 0.8%, and Hong Kong surged by 1.4%. Conversely, South Korea and Taiwan experienced slight declines of 0.4% and 0.2%, respectively. The pan-European Stoxx 600 index was down by 0.3% at the time of reporting.
This ongoing market turbulence, influenced by international economic policies and local factors, showcases the complex interplay of global influences on domestic equity markets and highlights the need for vigilance among investors in the current financial landscape.
