Sensex declines 250 pts from day's high, Nifty below 25,950: 3 key reasons behind market paring gains

Stock Market Today: Sensex, Nifty see profit booking at higher levels. 

The equity benchmark indices Sensex and Nifty witnessed profit booking at higher levels on Friday, trimming early gains.

In early trade, the Sensex climbed 585.69 points or 0.69 percent to hit the day’s high of 85,067.50. The broader Nifty advanced 163.7 points or 0.63 percent to 25,979.25.

However, the momentum faded as the session progressed. By around 1 pm, the Sensex had slipped nearly 200 points from the day’s peak to 84,892.10, while the Nifty was trading at 25,949.25.

The benchmark indices are set for third consecutive weekly losses after rupee slide and foreign outflows earlier this week.

1) Profit booking: A sharp pullback was seen at elevated levels. After the sharp rise in early trade, investors chose to lock in gains, leading to selling pressure in select heavyweights.

2) Key resistance: Traders also remained cautious near the 26,000 mark on the Nifty, which is seen as an immediate resistance zone. The index has been moving in a narrow range of 25,700 to 25,900, reflecting indecision in the market. Key support levels are placed at 25,700 and 25,600. Analysts said the market’s ability to hold above the 25,500 level remains crucial for sustaining sentiment.

Amruta Shinde, Technical and Derivative Analyst at Choice Equity Broking Private Limited, added prevailing volatility and global uncertainties warrant a selective approach. She advised investors to prefer buying on declines with strict stop-losses and cautious use of leverage. Fresh long positions, she said, should be considered only on a sustained breakout above 26,100, while closely tracking global cues and technical levels.

3) Japan’s 10-Year Yield Tops 2%: Global bond market movements also weighed on sentiment. Japan’s 10-year government bond yield climbed above 2 percent, touching a multi-decade high after the country’s central bank announced an interest rate hike. The yen weakened in volatile trade, while Japanese equities managed to hold gains. Although the decision was widely expected, the lack of clear guidance on future policy tightening kept global markets on edge.

Rising bond yields in major economies tend to impact emerging markets as it increases global risk aversion and influencing foreign investment flows.