The Indian stock market experienced significant volatility on Tuesday, with a strong rally losing momentum towards the end of the session due to rising geopolitical concerns.
The Sensex, which surged by over 1,100 points during the day, ended with a more modest gain of 239 points, closing at 77,578.38, marking a 0.31% increase. Similarly, the Nifty ended at 23,518.50, up by 64.70 points or 0.28%.
The late pullback came after news broke that Ukraine had launched its first missile strike using the ATACMS system on Russian territory.
This development escalated the already tense situation between the two countries, with Russia threatening severe retaliation.
As concerns over the conflict intensified, investor sentiment soured, causing the market to reverse its earlier gains.
Despite the late dip, the market had seen positive momentum throughout the day, with buying activity in several sectors.
The Nifty Media index stood out, rising by 2.45%. Other sectors such as auto, IT, financial services, pharma, FMCG, and private banks also performed well, contributing to the overall positive sentiment.
Among the top gainers in the Sensex pack were Mahindra & Mahindra, HDFC Bank, Tech Mahindra, Titan, and Tata Motors. On the other hand, stocks like Reliance, SBI, Tata Steel, Bajaj Finserv, and Maruti posted losses.
The broader market followed a similar trend, with 2,326 stocks advancing on the Bombay Stock Exchange (BSE), while 1,637 stocks closed in the red.
The India VIX, which measures market volatility, surged by 3.26%, reaching 15.66, signaling increased market anxiety.
Analysts: Geopolitical Tensions Drive Nifty Volatility & Market Uncertainty
Jatin Trivedi from LKP Securities noted that the Nifty index experienced significant fluctuations throughout the trading day, driven by an unexpected surge in geopolitical tensions between Russia and Ukraine.
This instability led to the index slipping below its 200-day moving average, highlighting investor unease.
Analysts believe the escalating conflict between Russia and Ukraine has created a selling environment in the market, with increased uncertainty prompting traders to pull back.
Additionally, the intensifying geopolitical risks are putting further pressure on the Indian rupee, contributing to the overall market volatility.
Foreign institutional investors (FIIs) were net sellers, offloading equities worth Rs 1,403 crore, while domestic institutional investors (DIIs) took the opportunity to buy, purchasing Rs 2,330 crore worth of stocks.
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