India’s Stock Market Declines as Investors Book Profits Amid Bihar Election Results

Mumbai, India – India’s equity benchmarks opened lower on Friday as investors took profits following a recent rally. Concerns about the U.S. Federal Reserve’s stance on interest rates contributed to declines in information technology stocks. The market will likely experience increased volatility as preliminary results from the Bihar state elections come in.

As of 9:20 a.m. IST, the Nifty 50 index dropped 0.34% to 25,790.55, and the BSE Sensex decreased by 0.30% to 84,211.55. Early trends indicated that the ruling National Democratic Alliance, which includes Prime Minister Narendra Modi‘s party, is leading in the elections.

Eleven out of the 16 major sectors reported losses, with IT companies—significant earners from the U.S.—slipping 0.8%. This decline followed hawkish remarks from Federal Reserve officials, dampening hopes for a near-term rate cut. Meanwhile, small-cap and mid-cap stocks remained largely flat.

The benchmarks had previously gained about 1.5% each over the last four trading sessions. A report from HDFC Securities noted that foreign institutional investors were net sellers for the fourth consecutive day, selling equities worth ₹383.68 crore on Thursday.

Traders observed that market sentiments were further affected by weak global market trends and uncertainty surrounding the election outcomes. V.K. Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, expressed optimism, stating the market’s long-term trend will be driven by fundamentals, including earnings growth. He noted that despite recent underperformance, the Nifty remains one of the best-performing indices over the past five years.

Broader Asian markets were also lower, with South Korea’s Kospi down 2.2%, Japan’s Nikkei 225 falling 1.7%, and Hong Kong’s Hang Seng declining 1.4%. U.S. markets ended lower on Thursday, indicating global concerns over interest rates and economic indicators. The U.S. Nasdaq plummeted 2.3%, marking its largest drop in a month.

As investors await clearer signs about the economic landscape and the election results, market analysts describe the short-term volatility as typical amid changing sentiment.