Indian stock markets experienced volatility on Friday, October 31, 2025, with both the Sensex and Nifty indices swinging between gains and losses. Investors appeared cautious near record highs, leading to a decline in the indices.

Market Performance:

• The BSE Sensex index was at 84,088, down by 316 points or 0.37 percent.
• The Nifty50 was also in the red, trading at 25,780, a decrease of 98 points or 0.38 percent.
• Broader market indices showed mixed performance, with the Nifty MidCap index rising 0.09 percent and the Nifty SmallCap index increasing 0.12 percent.

Sectoral Performance:

• The Nifty Metal index experienced a decline of 0.61 percent, and the Nifty Pharma index fell by 0.06 percent.
• On the positive side, the Nifty PSU Bank index gained 0.8 percent, followed by Nifty Realty (0.5 percent) and Nifty IT index (0.4 percent).

Key Factors Influencing the Market Decline:

• Foreign Institutional Investor (FII) Selling: Renewed selling pressure from foreign investors weighed on the market. On October 30, FIIs were net sellers, offloading Indian equities worth ₹3,077.59 crore.
• Cautious Global Cues: Mixed cues from global markets also contributed to the cautious sentiment. Overnight, the US market ended on a mixed note following the Federal Reserve's decision to cut interest rates.
• Profit Booking: The domestic indices were impacted by profit booking, as the Nifty 50 slipped below the 26,000 mark and the Sensex witnessed notable losses.
• US-China Trade Tensions: Disappointment over the outcome of the Trump-Xi summit, which delivered only a temporary truce in the US-China trade conflict, added to the cautious sentiment.
• Weakness in specific sectors: Declines in metals, banks, and financial services also contributed to the overall market decline.

Other influencing factors:

• Investors are closely monitoring economic data for signals that could influence the Federal Reserve's upcoming decisions on interest rates.
• Geopolitical and trade issues are causing investors to use bonds as a hedge, which may further impact the stock market.
• The increasing short positions created by FIIs suggest that they view Indian valuations as relatively high.

Market Outlook:

• The Indian stock market is expected to trade cautiously.
• Analysts suggest that the Nifty may consolidate between 25,700 and 26,100, indicating sideways movement.
• The Sensex is likely to remain under pressure around the 84,000-85,000 mark, as investors weigh profit booking and await fresh domestic and global cues.
• According to market experts, key support levels for the Nifty are at 25,800 and 25,700, with potential for further decline if these levels are breached.

Despite the current downturn, it is important to note that upbeat Q2 corporate earnings and easing US-China trade tensions helped to limit the losses.