Benchmark equity indices Sensex and Nifty 50 ended nearly 1 per cent lower on Monday after failing to sustain the recovery momentum in the mid-trading session amid weak global cues, rising geopolitical tensions in West Asia, a spike in crude oil prices, a correction in the Nasdaq and continued selling pressure in global technology stocks, which dampened investor sentiment across markets.
The BSE settled 719.08 points or 0.97 per cent lower at 73,524.26 . The declined 243.70 points or 1.04 per cent to close at 23,123.
Vinod Nair, head of research at Geojit Investments, said domestic equities outperformed global peers despite the ongoing consolidation phase, reflecting underlying structural resilience in the domestic market.
Both midcap and smallcap indices fell. Nifty Smallcap 100 was the worst-performing index, shedding close to 2 per cent. On the sectoral front, realty, metal and auto witnessed significant pressure. IT sector also remained under pressure, tracking weakness in global technology stocks as investors begin to question the sustainability of the AI-led rally.
According to Nair, the selling pressure in semiconductor-heavy global indices reflected early signs of valuation fatigue and unwinding of positions, though it may be premature to call it a trend reversal.
Ponmudi R, CEO of Enrich Money, also noted that signs of fatigue in the global AI and technology rally added to investor caution, while India VIX surged nearly 8 per cent, reflecting heightened market uncertainty and risk aversion.
Strong US labour market data and sticky inflation have increased the possibility of further monetary tightening by the US Federal Reserve, resulting in higher bond yields and a stronger US dollar. Nair cautioned that a similar trend could emerge domestically if inflation rises, increasing the likelihood of policy tightening in India as well.
“In this scenario, India may see relative outperformance if the global tech correction deepens, but elevated crude prices and rate uncertainties may cap the upside or keep markets range bound,” he added.
Wipro, Jio Financial top losers
Among the Nifty 50, Max Health, Power Grid and Bharti Airtel led the gainers, while , Jio Financial, Eternal, Hindalco and Shriram Finance were the major laggards.
The market breadth remained weak as the advance-decline ratio was skewed in favour of bears. A total of 431 stocks out of the Nifty 500 universe ended in the red.
Midcap & smallcap movers
In the mid-cap segment, Fortis Healthcare, Alkem Laboratories, LG Electronics and Naukri gained 1-2 per cent. Meanwhile, GE Vernova T&D, Hitachi Energy and Kalyan Jewellers fell 5-6 per cent.
Among small-cap stocks, Netweb Technologies, IFCI, FSL and GMDC dragged upto 8 per cent, weighing on the index. On the other hand, Syngene, and Aster DM Healthcare lead the gainers suring 1-3 per cent.
Asian markets ended sharply lower, led by South Korea’s Kospi, which plunged 8.29 per cent, and Japan’s Nikkei 225, which fell 3.85 per cent. European markets traded lower.
On Friday, BSE Sensex ended 116.67 points or 0.16 per cent lower at 74,243.34, and Nifty 50 was down 49.85 points or 0.21 per cent at 23,366.70. FIIs offloaded equities worth ₹8,776.25 crore on Friday, according to exchange data.
US markets had ended sharply lower on Friday, with the Nasdaq Composite tumbling 4.18 per cent, the S&P 500 declining 2.64 per cent and the Dow Jones Industrial Average falling 1.35 per cent.