Indian equity markets witnessed a sharp fall on Monday as investors turned cautious ahead of the US Federal Reserve’s policy decision this week.
Persistent selling by foreign institutional investors (FIIs) added further pressure and dragged overall market sentiment lower.
The Sensex closed at 85,102.69, losing 609.68 points or 0.71 per cent.
The index opened weak at 85,624.84 and continued to slip throughout the session. It extended losses and hit an intra-day low of 84,875.59 amid broad-based selling.
Nifty also declined sharply and settled at 25,960.55, down 225.90 points or 0.86 per cent.
Vinod Nair, Head of Research at Geojit Financial Services, said the market slipped below the 26,000 mark as investors remained cautious before the US Fed decision.
He said robust domestic macro numbers and the RBI’s recent rate cut failed to lift sentiment because global monetary policy concerns, persistent FII outflows, and currency weakness kept traders on edge.
He added that a surge in Japanese bond yields to multi-year highs intensified volatility, raising fears of a potential unwinding of the yen carry trade.
Stock Performance
Most Sensex stocks ended in negative territory. Major losers included Eicher Motors, Trent, Tata Steel, Bajaj Finance, Bajaj Finserv, Power Grid, Asian Paints, Tata Motors PV, Titan, NTPC, Kotak Bank, L&T, Bharti Airtel, M&M, Axis Bank, Hindustan Unilever, Sun Pharma, Ultratech Cement, ITC, Maruti Suzuki, and Infosys.
Tech Mahindra was the only stock that closed in the green.
Sectoral indices also reflected the broader weakness.
The Financial Services gauge fell 194 points or 0.70 per cent, while the Bank index dropped 538 points or 0.90 per cent. The Auto benchmark declined 342 points or 1.23 per cent.
Nifty FMCG slipped 662 points or 1.20 per cent, while Nifty IT edged down 112 points or 0.29 per cent.
Broader markets also faced heavy selling. Nifty Smallcap 100 plunged 456 points or 2.61 per cent, Nifty Midcap 100 dropped 1,106 points or 1.83 per cent, and Nifty 100 declined 281 points or 1.05 per cent.
The rupee weakened by 13 paise to close at 90.06 against the US dollar as sustained FII outflows, weak equities, and uncertainty over the India-US trade deal weighed on sentiment.
Analysts expect volatility to remain high with the US Fed decision and India’s CPI data scheduled this week. They foresee the rupee trading in the 89.75-90.30 range in the near term.
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