Domestic equity benchmarks witnessed sharp volatility in early trade on Monday, with the at the open before recovering part of the losses.
At 9:35 am, the BSE Sensex was trading at 73,008.12, down 575.10 points or 0.78%, while the NSE Nifty50 stood at 22,667.15, lower by 152.45 points or 0.67%.
The recovery from the day’s low indicates some buying interest at lower levels, but the overall sentiment remains cautious.
Dalal Street saw sharp intraday swings, reflecting heightened nervousness among investors. After a steep fall at the open, benchmarks pared some losses amid selective buying, but the absence of sustained momentum highlights the fragile undertone.
Analysts expect volatility to remain elevated as global uncertainties continue to dictate sentiment.
Escalating tensions in West Asia remain the key trigger behind the selloff. The conflict has entered its fifth week, with signs of further escalation as new players get involved and military activity intensifies. This has dampened global risk appetite and led to a broad-based weakness in equities.
Surging crude oil prices are adding to the pressure, with Brent crude climbing to around $116 per barrel, raising concerns over inflation and India’s external balances.
Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the ongoing conflict has significantly altered India’s macro outlook.
“The Goldilocks macro scenario which India had before the war has almost disappeared. Instead of high GDP growth, low inflation and strong earnings growth, we are now looking at lower growth, higher inflation, wider fiscal and current account deficits, and weaker earnings prospects for FY27,” he noted.
He added that the market has already priced in much of the negativity, with the Nifty’s trailing PE moderating to around 19.9 times — a level he described as “fair but not yet cheap,” while pointing out that segments like financials are turning attractive.
Sustained foreign institutional investor (FII) outflows continue to weigh on market sentiment amid a global risk-off environment.
However, Vijayakumar flagged a key near-term development on the currency front. “A significant development today is likely to be strengthening of the rupee following the RBI directive capping net open positions in the offshore market. Unwinding of large dollar positions could support the rupee in the near term,” he said.
Despite the partial recovery from early lows, the broader market mood remains cautious. Investors are expected to closely track geopolitical developments, crude oil prices, currency movement and institutional flows, with volatility likely to remain the defining feature of the session.