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India Stocks Tumble on Geopolitical Fears
5 Jan
Summary
- Indian equity markets saw sharp declines after reaching all-time highs.
- Geopolitical tensions, particularly US actions in Venezuela, fueled investor caution.
- IT stocks were major laggards, dragging down benchmark indices significantly.
Indian equity markets surrendered early gains to close lower on Monday, with benchmark indices experiencing significant profit booking after touching fresh all-time highs. The Sensex declined 322.39 points to close at 85,439.62, while the Nifty slipped 78.25 points to settle at 26,250.30, failing to sustain record levels amid heightened geopolitical concerns.
Investor sentiment remained guarded as geopolitical tensions escalated following US military action in Venezuela over the weekend. Cautionary remarks from analysts and concerns over potential US tariff actions linked to India's oil imports added to market jitters. IT stocks were the biggest laggards, with the IT index shedding over 1.5 percent, while HDFC Bank and ONGC also weighed on sentiment.
Conversely, defence and realty stocks outperformed, with Bharat Electronics surging and the Nifty Realty index climbing. Despite a mixed broader market performance and a weakening rupee, analysts anticipate markets to remain firm with a positive bias, supported by business updates and pre-budget expectations, though global developments could introduce volatility.
