Market volatility returns as banking stocks drag Sensex, Nifty lower

Indian equity benchmarks witnessed a volatile trading session on Wednesday as selling pressure in banking and financial stocks pulled the indices into negative territory after a cautious start.

The BSE Sensex and NSE Nifty 50 opened marginally higher, tracking mixed cues from global markets. However, the early optimism faded quickly as investors turned cautious and booked profits in heavyweight banking counters. Shares of ICICI Bank, Kotak Mahindra Bank and several other financial stocks declined during the session, weighing on the broader market.

Market participants remained wary amid lingering geopolitical tensions in West Asia and continued uncertainty in global financial markets. Analysts said foreign institutional investors have also maintained a cautious stance in recent sessions, contributing to the subdued market sentiment.

Despite the weakness in frontline indices, select sectors showed pockets of resilience. Metal and pharmaceutical stocks attracted some buying interest, while midcap and smallcap counters traded on a mixed note.

Experts noted that the recent run-up in equities has led to intermittent profit booking, particularly in banking and financial stocks which have been key drivers of the rally in recent months. They added that global developments and movements in crude oil prices will continue to influence investor sentiment in the near term.

For now, the broader trend remains sensitive to global cues, with investors closely watching macroeconomic signals and institutional flows for clearer direction.