Domestic stock markets experienced significant declines on Monday, driven by continuous selling pressure, heightened by escalating crude oil prices and global uncertainties. The BSE Sensex closed with a loss of 1,635.67 points (2.22%) at 71,947.55, while the NSE Nifty50 fell by 488.20 points (2.14%) to 22,331.40.
Throughout the trading day, the markets remained under pressure, with attempts at recovery proving short-lived. The persistent downward trend underscored ongoing selling activities and a prevailing risk-averse attitude among investors.
Investor wealth took a substantial hit as the total market capitalization of BSE-listed companies dropped from Rs 421.62 lakh crore to Rs 412.72 lakh crore, marking a loss of nearly Rs 9 lakh crore in a single session.
Dalal Street witnessed notable volatility, reflecting investor nervousness and a fragile market sentiment. The day began with a weak start, leading to a widespread sell-off, particularly impacting banking and financial stocks. Key players like HDFC Bank, Axis Bank, State Bank of India, and Bajaj Finance saw declines ranging from 3% to 5%.
Other major stocks including Bharti Airtel, Larsen & Toubro, Infosys, and Kotak Mahindra Bank also closed lower, indicating weakness across various sectors. Despite the bearish trend, some sectors like oil and commodities showed resilience, with stocks like ONGC, Coal India, and Hindalco managing modest gains.
The primary cause of the market downturn was the surge in crude oil prices, currently around $115–116 per barrel due to tensions in West Asia. This spike in oil prices poses significant concerns for India, a major oil importer, as it could inflate the import bill, drive up inflation, and squeeze corporate profits, thereby impacting economic growth and investor confidence.
The sell-off was further exacerbated by foreign institutional investors offloading their positions, adding to the downward pressure on the market. Factors such as global uncertainties, rising oil prices, and FII outflows weighed on sentiment, particularly affecting banking stocks following new RBI regulations on foreign exchange positions.
Despite recent corrections in valuations, risks persist due to ongoing volatility in oil prices and currency weakness, potentially leading to near-term earnings downgrades. The broader market sentiment remains cautious globally, with factors like a strong US dollar, high global bond yields, and geopolitical uncertainties contributing to a risk-averse environment.
While intermittent recovery attempts were made during the trading session, the overall market trend remained negative. With crude oil prices remaining high and global risks prevailing, market volatility is expected to persist in the short term.