Sensex falls 2.22 per cent, Nifty drops 2.14 per cent
"The fall today is not a standalone reaction but an extension of the 10–11 per cent correction already underway this month"
Indian equity markets ended sharply lower on Monday, with the Sensex declined 1,635.67 points or 2.22 per cent to end at 71,947.55, while the Nifty declined 488.20 points or 2.14 per cent to end at 22,331.40.
The major reasons behind the fall was the broad-based selling across sectors, lingering global uncertainties, elevated crude oil prices, and sustained FII outflows, according to the Bajaj Broking Market Commentary.
Speaking with The Tribune, Karan Rijhsinghani, Director & Head (Product & Advisory), Atom Privé Financial Services, said the fall today is not a standalone reaction but an extension of the 10–11 per cent correction already underway this month. The decline was led by financials such as HDFC Bank and ICICI Bank, indicating tightening liquidity conditions and rising funding costs, with short-term rates moving closer to 7 per cent.
Moreover, the crude sustaining above USD 110–115 is now directly impacting margin expectations across consumption and industrial sectors, while mid and small caps have corrected 10–15 per cent, reflecting positioning unwinds and reduced liquidity rather than a change in fundamentals.
“From a near-term perspective, volatility is expected to remain elevated, with India volatility index (VIX) holding in the 20–25 range. Over the next 5–7 days, markets are likely to remain volatile. A technical bounce of 2–3 percent is possible, but it is unlikely to sustain unless crude prices cool and the rupee stabilises. Key levels to watch are 22,000 on the downside and 22,800–23,000 on the upside for Nifty,” he said.
Rijhsinghani cautioned that investors should avoid aggressive bottom-fishing at this stage. The focus should be on reducing leveraged exposure and gradually reallocating towards high-quality large caps, particularly in banking and defensives.
Meanwhile, the rupee initially opened higher after RBI reduced banks’ overnight net open position limit to USD 100 million, but later reversed sharply, falling towards 95.2 from its opening levels.
