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Equity benchmarks gave up early gains to trade lower around noon on Tuesday as muted global cues and escalating tensions along the India-Pakistan border weighed on investor sentiment.

The Sensex had opened on a firm note, rallying 442.94 points to hit a high of 80,661.31 in morning trade. However, the index soon gave up gains and fell over 500 points from the day's top to touch an intraday low of 80,122.02.

The broader NSE Nifty too slipped below the 24,350 mark after rising as much as 129.15 points to 24,457.65 earlier in the day.

Market analysts attributed the sharp reversal in sentiment to a combination of geopolitical concerns, particularly tensions between India and Pakistan, along with lacklustre global cues.

Among the key laggards were Dr. Reddy's Laboratories, UltraTech Cement, Power Grid Corporation, Eicher Motors and Shriram Finance — falling up to 2 per cent.

Key factors dragging the market down:

1. Rising border tensions: Pakistan violated the ceasefire along the Line of Control (LoC) in Jammu and Kashmir for the fifth straight night on Monday, with the Indian Army responding firmly. Investors also turned cautious following remarks by Pakistan Defence Minister Khawaja Asif to Reuters that "a military incursion" by India was imminent in the aftermath of the Pahalgam terror attack.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, added "investors should exercise caution in the near-term in the context of the high uncertainty regarding the fallout from the border tensions."

2. Muted global cues: Asian markets offered little support. While South Korea’s Kospi stayed in positive territory, Hong Kong’s Hang Seng and China’s Shanghai Composite were quoting in the red, indicating a lack of strong global direction.

3. Spike in volatility index: The India VIX — a measure of market volatility — rose over 3 percent to 17.56, indicating heightened nervousness among traders.

What technical charts suggest:

According to Anand James, Chief Market Strategist at Geojit Financial Services, “A close above 24,190 has opened the possibility for Nifty to move towards 24,500–24,850. However, last week’s high of 24,359 is now close, and failure to hold 24,300 could lead to volatility.” James highlighted key support levels at 24,190, 24,070, 23,950 and 23,670.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.

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