The stock market witnessed a sharp decline on Monday during the closing session as Sensex declined more than 550 points to close above 85,000 and Nifty tumbled over 200 points to test 26,000.
In the 30-share BSE Sensex, among the top gainers was Tech Mahindra and the laggards included stocks like TCS, HCLTech, Reliance Industries, HDFC Bank and ICICI Bank, among others.
In the broader markets, the Nifty Smallcap 250 declined 2.27 per cent. Sectorally, Nifty Realty tumbled 3.53 per cent.
During the morning session, the markets opened on a muted note or marginally lower ahead of FOMC, as investor sentiments were cautious.
The Sensex opened trade at 85,625.12 or 87 points down, and the Nifty traded at 26,131.75 or 54 points down.
What Do Experts Say?
Mixed news flow is expected to keep markets volatile in the near term. Strong economic fundamentals and early signs of an earnings revival continue to provide underlying support to equities.
VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, said the large fiscal and monetary stimulus rolled out this year has helped drive a sharp recovery in growth, reflected in the 8.2 per cent Q2 GDP print and the RBI’s upward revision of FY26 GDP growth to 7.3 per cent. He said this outlook is favourable for the market.
He also noted that a low GDP deflator, due to softer inflation, has weighed on nominal GDP and corporate earnings growth. However, he said leading indicators suggest nearly 15 per cent earnings growth is achievable in FY27, which is a positive signal.
Vijayakumar cautioned that strong negatives remain. Sustained depreciation of the rupee has been pushing foreign institutional investors (FIIs) to continue selling in the market.
Devarsh Vakil, Head of Prime Research, HDFC Securities, said US markets ended higher on Friday, supported by softer inflation data and resilient macro indicators that kept expectations of Federal Reserve rate cuts intact. He said investors remained cautious ahead of the upcoming FOMC meeting, further inflation data and year-end portfolio adjustments.
Foreign Outflows, Global Market Cues
Exchange data showed FIIs sold equities worth Rs 438.90 crore on Friday, while domestic institutional investors (DIIs) bought shares worth Rs 4,189.17 crore.
Asian markets were mixed, with Japan’s Nikkei 225, Shanghai’s SSE Composite and South Korea’s Kospi trading in the green, while Hong Kong’s Hang Seng was in the red.
US Markets and Oil Prices
Brent crude rose 0.13 per cent to USD 63.83 per barrel.
