Indian Stock Market Plummets: Sensex Falls 876 Points
After a week of gains, the Indian stock market faced a significant downturn, with the Sensex dropping over 876 points on Monday.
Sensex closed at 73,852.90, down 876 points or 1.17%.
Major banking stocks, particularly Axis Bank and HDFC Bank, led the decline.
Foreign institutional investors continue to sell, impacting market sentiment.
On Monday, the Indian stock market experienced a sharp decline, with the BSE Sensex falling by 876 points, closing at 73,852.90. The Nifty50 also saw a significant drop, ending the day at 22,888.95, down 257 points or 1.11%. This downturn erased nearly ₹4.70 lakh crore from the total market capitalization of BSE-listed companies, which now stands at ₹467 lakh crore.
The market's decline comes after a week of positive momentum, where the Nifty had surged by 2.8%. However, investor sentiment turned negative due to heavy selling in major private banking stocks, particularly following disappointing quarterly results. V K Vijayakumar, Chief Investment Strategist at Geojit Investments, noted that while the recent surge in Nifty and positive banking results had initially buoyed the market, escalating tensions in Hormuz and rising crude oil prices are now acting as significant headwinds.
Axis Bank emerged as the largest loser, with its shares plummeting over 5% after reporting a 38% year-on-year increase in net profit, which nonetheless fell short of market expectations. Similarly, HDFC Bank's shares dropped by more than 2% despite a 4.6% rise in net profit for the same quarter. Other notable declines included ICICI Bank and Yes Bank, both of which saw their shares fall by over 1%.
The market's troubles were compounded by continued outflows from foreign institutional investors (FIIs), who have been net sellers in nine of the eleven trading sessions this month. Although FIIs purchased Indian equities worth ₹1,166 crore last Friday, this was minimal compared to the significant outflows recorded previously. The high crude oil prices, which remain above $107 per barrel, further dampened investor sentiment, despite a slight decline in Brent crude futures.
Looking ahead, analysts suggest that the market may remain volatile, particularly with upcoming corporate earnings reports. Vinod Nair, Head of Research at Geojit Investments, indicated that the recent selling pressure reflects cautious investor sentiment amid weak global cues and the impact of quarterly earnings on private banks. As the Nifty slipped below the critical 23,000 mark, the market's breadth remained weak, highlighting ongoing uncertainties in both domestic and international markets.
