Indian indices dip as profit taking and weak global cues weigh on markets
The Sensex slipped about 500 points and the Nifty fell below 23,800 on Wednesday, driven by profit booking and broader Asian market weakness.
Indian benchmark indices pared earlier gains on Wednesday, with the Sensex dropping roughly 500 points from its intraday high and the Nifty slipping below the 23,800 level. By mid-morning the Sensex was at 76,869.25, down 48.60 points (0.06%), while the Nifty stood at 23,793.80, down 17.05 points (0.07%).
The retreat followed an early rally that saw the Sensex rise 478 points to 77,396.04 and the Nifty climb 135 points to 23,946.35. Analysts attributed the pullback to profit booking after the indices had risen about 5% over the previous four sessions and closed at two-month highs.
Weakness in Asian markets also contributed, as major indices posted their steepest declines in more than six months. Japan’s Nikkei 225 fell over 4%, the Topix slipped nearly 2%, and the MSCI Asia Pacific Index dropped as much as 2.3% amid a sell-off in technology stocks. South Korea’s Kospi reversed earlier gains to trade 4% lower, while markets in Taiwan, Japan and Singapore also moved down.
The regional slump was linked to concerns that a potential Democratic victory in upcoming U.S. midterm elections could tighten regulatory scrutiny of artificial-intelligence firms, dampening technology spending in Asia. Investors are questioning whether large AI-related investments will generate sufficient returns.
U.S. stock futures mirrored the sentiment, with S&P 500 futures down 1%, Nasdaq-100 futures off 1.7%, and Dow Jones Industrial Average futures slipping 0.6% as traders weighed the prospect of a Democratic-controlled Congress after the 2026 midterms.
"Nifty opened marginally lower near the 23,742 mark but attracted buying interest in early trade, reflecting resilience at lower levels. The psychological 24,000 mark remains the immediate resistance to watch. A sustained breakout above this level could reinforce bullish momentum and open the door for further gains towards higher resistance levels," said Ponmudi R, a research analyst at Enrich Money.
"On the downside, 23,600 remains the immediate support. Holding above this level will be crucial to sustaining the prevailing positive momentum. The RSI has climbed to around 68, signalling strong bullish momentum. The near-term outlook therefore remains positive, although a decisive breakout above 24,000 would be necessary to confirm the next leg of the upward move," he added.