Why is Indian stock market down despite NDA lead in Bihar Election 2025?

Sensex today | Indian stock markets: Indian benchmark indices BSE Sensex and Nifty50 fell on Friday despite the National Democratic Alliance (NDA) leading in the Bihar Election 2025, as global weakness and fading hopes of a US Fed rate cut weighed on sentiment. 

 

The Sensex declined up to 0.51 per cent to an intraday low of 84,042.75, while the Nifty50 slipped 0.44 per cent to 25,764.90.

 

Infosys, Tata Steel and Tech Mahindra led losses on the Sensex, while Adani Ports, Asian Paints and Trent gained. On the NSE, Infosys, Tata Steel and Eicher Motors were top laggards, with Adani Enterprises, Jio Financial and Asian Paints among gainers. Broader markets were mixed.  Ponmudi R, CEO of Enrich Money, said, “Indian markets opened on a subdued note, tracking weakness in global equities, as mixed commentary from US Federal Reserve officials on the pace and timing of future rate cuts kept investors cautious and prompted selective profit booking… overall sentiment remains cautious to neutral.”

 

At 10:50 AM, the Sensex was off its lows, down 0.36 per cent at 84,175.97, while the Nifty50 traded 0.34 per cent lower at 25,792.05.

 

However, VK Vijayakumar, chief investment strategist at Geojit Financial Services, noted that the market reaction to the election results would be short-lived. “The medium to long-term trend of the market will be dictated by fundamentals… there is room for optimism as indicated by prospects of robust GDP growth and improving earnings growth.”  CATCH STOCK MARKET LIVE UPDATES TODAY

Key reasons for the Sensex, Nifty decline despite NDA’s lead

 

Weak global cues 

Asia-Pacific indices tracked Wall Street’s sharp sell-off, weighed down by tech weakness and fading hopes of a US rate cut. Japan’s Nikkei dropped 1.85 per cent, South Korea’s Kospi fell 2.29 per cent, Hong Kong’s Hang Seng slid 0.88 per cent, and China’s CSI 300 lost 0.64 per cent. Australia’s ASX 200 declined 1.58 per cent.  Meanwhile, US markets fell again as investors dumped high-valuation tech and AI stocks. The Dow slipped 1.65 per cent, the S&P 500 lost 1.66 per cent, and the Nasdaq dropped 2.29 per cent.  

Fed rate cut hopes fade

Caution around the Federal Reserve intensified after policymakers signalled uncertainty about a December rate cut. Boston Fed President Susan Collins said that keeping rates steady “for some time” may be appropriate. Market expectations for a December cut have now dropped to roughly 50-50.

  Liquidity pressures dominate

 

According to G Chokalingam of Equinomics Research, the market weakness is largely liquidity-driven. Over a quarter (1/4th) of small- and mid-cap (SMC) stocks are already down 20-40 per cent from their peaks, curbing retail participation. IPOs have absorbed more than ₹1.5 trillion, promoters have exited stakes in several SMC names, and FPIs have also withdrawn funds. 

 

“With multiple IPO lock-ins set to expire in the next two months, liquidity fears are expected to persist,” he added.

 

Chokalingam expects broader SMC weakness to continue through CY2025, though Sensex and Nifty may recover on strong domestic fundamentals and DII support.

 

Persistent FII selling

 

Foreign investors have offloaded ₹7,051.78 crore worth of equities so far this week, including ₹383.68 crore on Thursday. DIIs, meanwhile, bought ₹3,091.87 crore on Thursday, offsetting some pressure. 

Technicals 

 

According to technical experts, Nifty turned lower after briefly pushing above the 25980, confirming the caution signalled yesterday. 

 

“The extension in uptrend aiming 26130-26550 remains alive, as oscillators are yet to signal a trend reversal. However, the downside marker may be pulled up towards 25789,” said Anand James, chief market strategist at Geojit Investments Limited.

  Also Read: NDA leads Bihar elections 2025, global cues weak: Should you buy the dip?