CHENNAI: Indian markets on Wednesday (July 2) witnessed a knee-jerk reversal from early optimism, as domestic financial stocks succumbed to global uncertainty. However, underlying macroeconomic strength and selective sectoral gains helped limit the overall decline.
Early gains were erased by late-session selling pressure, particularly in financial heavyweights such as HDFC Bank, Larsen & Toubro, and Reliance Industries. The decline was largely triggered by concerns over the upcoming US tariff deadline, sustained foreign capital outflows, and mixed global cues.
The BSE Sensex closed at 83,409.69, down 287.60 points or 0.34%, after touching an intraday low of 83,150.77. The NSE Nifty 50 ended at 25,453.40, lower by 88.40 points or 0.35%.
Broader markets were also weak. The Nifty Midcap index declined by 0.36%, while the Nifty SmallCap index slipped 0.41%.
Volatility:
The India VIX (volatility index) dropped 0.66% to close at 12.44, indicating slightly reduced near-term market volatility.
Market Sentiment Drivers:
According to analysts, investor sentiment was affected by:
Global uncertainty, especially ahead of the US tariff decision expected by July 9
Continued foreign capital outflows
Pressure in key sectors such as financials and real estate
The near-term outlook remains cautious as markets await clarity on Q1 corporate earnings and trade developments. However, the broader trend is expected to remain range-bound, supported by macroeconomic stability and strong IPO momentum. July is expected to see approximately $2.4 billion worth of public issues.