Sensex drops nearly 400 pts, Nifty below 25,000: Muted global cues among key factors behind market decline

Sensex, Nifty declined on Friday amid profit-taking a day after sharp rally.

The equity benchmarks came under pressure on Friday as profit-booking and weak global cues dragged the Sensex down by nearly 400 points and pulled the Nifty below the psychologically important 25,000-mark. The slide comes a day after both indices had registered sharp gains.

The Sensex declined 200.15 points or 0.24 percent to settle at 82,330.59. During the day, it lost 383.79 points or 0.46 percent to 82,146.95. The NSE Nifty dropped 42.30 points or 0.17 percent to 25,019.80.

Market sentiment was weighed down by selling in IT counters and a largely subdued trend across Asian peers.

Among the key laggards were Bharti Airtel, IndusInd Bank, Shriram Finance, HCL Technologies and Grasim Industries — falling up to 3 percent.

Key Factors Behind Friday’s Market Decline:

1) Weak Global Cues: Asian equities were mostly in the red, tracking subdued investor sentiment. Japan’s Nikkei 225, Shanghai’s SSE Composite, and Hong Kong’s Hang Seng indices were all trading lower. The mood was dampened further after data showed Japan’s economy contracted by 0.7 percent in the first quarter on an annualised basis. The report pointed to the lingering impact of global trade uncertainties on exports and domestic consumption.

2) IT Stocks Under Pressure: The Nifty IT index was among the top sectoral losers, dropping over 1 percent. The decline comes amid profit-taking after a recent rally in technology shares.

"While a potential trade deal between India and the US can be a near-term trigger for markets, valuations have turned costly after the recent rally and with the moderation in earnings, the upside for markets could be capped," analysts led by Mahesh Nandurkar of Jefferies said, reported Reuters.

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3) Lack of Clarity on India-US Trade Deal: Investors also stayed cautious amid no clear breakthrough in the proposed trade agreement between India and the United States, yet. Union Commerce Minister Piyush Goyal is scheduled to visit Washington from May 17, heading a delegation to push forward talks. Though US President Donald Trump recently stated that India had offered a "no tariffs" deal, the absence of firm commitments kept market participants on the sidelines.

India-US trade deal: On Trump's zero-tariff claim, India says deal not final, relief works both ways, reports CNN-News18

Technical View:

Anand James, Chief Market Strategist at Geojit Financial Services, said the Nifty had managed to rise above 25,000 for the first time since October 2024 in the previous session, breaking past a key triangular pattern. However, he cautioned that Friday’s early weakness could lead to some pullback.

“Despite the breakout, with nearly 74 per cent of Nifty 50 stocks still below their upper Bollinger Bands, the broader trend remains constructive,” James said.

According to him, the index may find support at 24,806, while resistance could emerge around 25,235. Intraday movements, especially in early trade, may test the 24,971 level before another attempt to move higher.

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