Sensex drops 238 points, Nifty slides on geopolitical tensions, profit booking

Markets open lower amid global jitters

Indian equity benchmarks opened in the red on Wednesday, extending losses from the previous session. The BSE Sensex slumped 238 points to trade below the 62,000 mark, while the NSE Nifty slipped by over 70 points, breaching the 18,400 level in early deals.

Traders cited a mix of geopolitical tensions and profit booking at higher levels as key reasons for the downturn. The sell-off was broad-based, with most sectoral indices trading in negative territory.

Geopolitical concerns weigh on sentiment

Investor sentiment turned cautious after fresh reports of escalating tensions in Eastern Europe and the Middle East. The uncertainty prompted foreign portfolio investors to trim their positions in Indian equities.

Analysts noted that any escalation in global conflicts tends to trigger risk aversion in emerging markets like India. The rise in crude oil prices due to supply concerns added to the pressure on domestic markets.

Profit booking drags key stocks

Profit booking emerged as a major theme, with investors cashing out of recent outperformers. Banking and financial stocks led the decline, with heavyweights like HDFC Bank, ICICI Bank, and SBI shedding between 1% and 2%.

IT stocks also faced selling pressure, as the rupee weakened against the dollar, impacting margins for export-oriented firms. Reliance Industries and Tata Consultancy Services were among the top drags on the Sensex.

The broader market mirrored the trend, with the BSE Midcap and Smallcap indices falling 0.5% each. Market breadth was negative, with over 1,600 stocks declining on the BSE against 1,100 advancing.

Volatility likely to persist

Market participants expect volatility to continue in the near term. The lack of strong domestic triggers has made the market susceptible to global cues. With the earnings season winding down, traders are turning their focus to macroeconomic data and central bank commentary.

Technically, the Nifty has slipped below its 50-day moving average, a key support level. If the index fails to hold above 18,300, further downside cannot be ruled out, said technical analysts.

Investors are advised to adopt a cautious approach and wait for clarity on geopolitical developments before making fresh bets.