Indian stock indexes decline in early trade after four-day rally

Business Industry

Posted by AI on 2025-08-20 06:30:34 | Last Updated by AI on 2025-08-21 14:56:59

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Indian stocks continued their downward trajectory today even though domestic economic indicators showed promising signs of recovery. The BSE Sensex index dropped 146.64 points to 81,497.75 in initial trade, with financial, energy, and FMCG stocks leading the decline. The broader Nifty 50 index fell by 0.23 percent, with banking, financial, and energy stocks being the worst-performing.

The drop comes as a surprise after four consecutive days of rallying, and experts believe it to be a natural correction amid emerging concerns over the new COVID-19 variant and its impact on global growth. However, they remain optimistic about the market's outlook in the long term.

"The market is expected to remain volatile amid uncertainty over the new coronavirus variant and the US Federal Reserve's stance on monetary policy," said Ajit Mishra, VP-Research, Religare Broking Ltd. "However, investors should not panic and look for buying opportunities as the underlying fundamentals of the market remain robust and inflation is expected to be transitory."

Despite today's decline, domestic markets remained range-bound throughout the week, supported by strong earnings results and positive economic data. The markets were also buoyed by the Reserve Bank of India's decision to maintain a status quo on policy rates during its meeting earlier this week.

Going forward, market participants will closely monitor global trends and any fresh updates on the new coronavirus variant. Moreover, the upcoming Union Budget and its implications for the economy will be a significant factor in driving market sentiment next month.

Overall, today's drop in stock indexes serves as a reminder that even promising economies can be susceptible to external shocks and emerging concerns. However, experts agree that investors should focus on the long-term prospects of quality companies and avoid getting distracted by short-term market volatility.

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