The Nifty 50 and Sensex declined on Friday, limiting their weekly gains, weighed by broad-based sectoral losses and investor anxiety over geopolitical tensions following a deadly militant attack in Kashmir.
Both the benchmarks rose about 0.8% each this week. IT index jumped 6.6% to log their best week since June 7, 2024.
Analysts attributed the sharp gains in the IT index to better-than-feared earnings outlook by software companies as well as hopes of easing trade tensions.
On the day, 12 of the 13 major sectors declined.
The broader, more domestically focussed small-caps and mid-caps lost about 2.5% each, as investors turned risk-averse after an attack on tourists in Kashmir killed 26 men and heightened geopolitical tensions.
In contrast to domestic equities, the MSCI Asia ex-Japan index advanced 0.3%, after U.S. President Donald Trump said trade talks between the world's top two economies were underway, pushing back against contradicting Chinese claims.
While the return of foreign inflows and expectations of a bilateral trade deal between India and the U.S. are strong tailwinds for the markets, the potential headwind looming large is the uncertainty regarding India's response to the terror attack, said VK Vijayakumar, chief investment strategist at Geojit Investments.
Oil-to-telecom conglomerate Reliance Industries traded flat ahead of reporting fourth-quarter results later in the day.
Car maker Maruti Suzuki fell 1.7% on posting a surprise profit drop in the March quarter.
Private lender Axis Bank lost 3.4% as brokerages flagged weak loan growth. The bank, which reported results on Thursday, indicated it may take a few quarters for asset quality to improve.
Bucking the trend, SBI Life jumped 5.4% after logging a 10% year-on-year growth in value of new business in the March quarter.
