Sensex and Nifty fell sharply on Tuesday, dropping more than 1% as a selloff in IT stocks spooked investors. Analysts said that due to the current uncertainty and higher volatility in the market, this downward trend could continue in the short term. They added that attempts by the bulls (investors hoping for a rise) to push the indices higher may face strong selling pressure.
In its India strategy note, BNP Paribas said its team met 45 investors in Hong Kong and Singapore. Compared to discussions in November 2025, investors are now slightly more open to Indian equities. They acknowledged several positive factors, including a better earnings outlook, strong high-frequency economic indicators, and trade deals with the EU and the US.
However, investors still see more attractive opportunities in other Asian markets such as Korea, Taiwan, and Japan. Kunal Vora, Head of India Equity Research, said India is currently seen as a hedge—a safe option—if global AI-related trade reverses, but there is no urgent reason for investors to enter heavily into Indian stocks yet.
For the day, the Sensex closed at 82,225.92, down 1,068.74 points or 1.28%. The Nifty fell to a low of 25,327.60 but recovered slightly to close at 25,424.65, down 288.35 points or 1.12%.
Overall, the market showed caution amid profit booking in IT stocks, global uncertainties, and continued volatility. Analysts suggest investors should monitor domestic earnings trends and global developments before making significant moves in Indian equities.