The domestic equity benchmarks traded with modest losses in morning trade, weighed down by a mix of global and domestic factors. India's recent forex data revealed a decline in its reserves. Meanwhile, the Israel-Iran truce helped ease geopolitical tensions, and growing optimism over a potential US-India trade deal supported sentiment. Inflows from foreign institutional investors further contributed to the positive undertone. Even concerns around the July 9 U.S. tariff deadline took a backseat, as reports of a likely extension helped calm investor nerves.

The Nifty traded below the 25,600 level. Private bank shares witnessed profit booking after advancing in the past two consecutive trading sessions.

At 10:28 IST, the barometer index, the S&P BSE Sensex, declined 284.60 points or 0.33% to 83,778.85. The Nifty 50 index lost 82.05 points or 0.32% to 25,556.75.

In the broader market, the S&P BSE Mid-Cap index rose 0.25% and the S&P BSE Small-Cap index jumped 0.62%.

The market breadth was strong. On the BSE, 2,321 shares rose and 1,324 shares fell. A total of 222 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, rallied 3.39% to 12.81.

Economy:

India’s forex reserves dropped by $1.01 billion to $697.93 billion for the week ended June 20, the Reserve Bank of India said on Friday.

For the week ended June 20, foreign currency assets, a major component of the reserves, dropped by $357 million to $589.06 billion, the data released on Friday showed.

The gold reserves were down by $573 million to $85.74 billion during the week, the RBI said.

The Special Drawing Rights (SDRs) declined by $85 million to $18.672 billion, the apex bank said.

India’s reserve position with the IMF also declined by $1 million to $4.45 billion in the reporting week, the apex bank data showed.

Buzzing Index:

The Nifty Private Bank index fell 0.31% to 28,417.85. The index rallied 1.34% in the past two consecutive trading sessions.

Kotak Mahindra Bank (down 1.41%), HDFC Bank (down 0.60%), Axis Bank (down 0.52%) and ICICI Bank (down 0.50%) were the top losers.

On the other hand, RBL Bank (up 3.73%), Bandhan Bank (up 2.35%) and Federal Bank (up 1.88%) edged higher.

Stocks in Spotlight:

Alembic Pharmaceuticals surged 8.40% after the company received final approval from the US Food & Drug Administration (USFDA) for its Abbreviated New Drug Application (ANDA) for Doxorubicin Hydrochloride Liposome Injection.

ITD Cementation India rallied 4.22% after the company secured an international marine contract worth $67.4 million (approximately Rs 580 crore) for jetty construction works related to the Ruwais LNG project in Abu Dhabi.

Interarch Building Solutions rose 0.69%. The company announced that it has secured an order worth Rs 77 crore from Amara Raja Infra.