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The Indian benchmark equity indices, Sensex and Nifty, witnessed a significant decline on Monday, dragged down by auto and IT stocks. The BSE Sensex plunged over 750 points to trade at around 71,900 level, while Nifty50 dipped below 21,850, marking a drop of 210 points.
The volatility in the market spiked due to the ongoing fourth phase of Lok Sabha elections. NTPC, Reliance Industries, and Power Grid emerged as the major laggards in early trading on the Sensex, contributing to its downward trajectory.
However, a few stocks managed to buck the trend and post gains. Sun Pharma, HUL, and Kotak Bank were the sole gainers at the opening bell, providing some respite to investors amidst the overall market sell-off.
Tata Motors witnessed a sharp decline of over 6% as the company anticipated a weakened local demand for passenger vehicles in the first half of the fiscal year 2025, partly attributed to the ongoing national elections.
On the other hand, JK Cement opened 6% higher after reporting a substantial 101% year-on-year increase in its consolidated net profit to Rs 219.75 crore during the fourth quarter of FY24.
The Nifty Auto index declined by 2.5%, primarily influenced by the losses in Tata Motors, TVS Motor, and Samvardhana Motherson. Nifty PSU Bank also plunged by 2.1%, dragged down by Bank of India, Union Bank of India, and PSB.
Market analysts attributed the aggressive FPI selling in May to a shift in stance from 'sell China, buy India' to 'sell India, buy China' due to the recent outperformance of Chinese stocks and the underperformance of Indian stocks.
Experts believe that the Nifty could continue to trade within a range of 21777-22232 in the near term. Improved sentiment has contributed to a rise in Chinese blue chips, reaching a seven-month high.
Foreign investors continued their selling spree, with a net sale of Indian shares worth Rs 2,118 crore on Friday, while domestic institutional investors net bought Rs 2,710 crore in stocks.
Oil prices extended their downward trend on Monday, reflecting weak fuel demand and tempered expectations of interest rate cuts, which could potentially slow down economic growth and reduce fuel consumption.
The Indian rupee remained stable, opening flat at 83.51 against the US dollar on Monday. The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, witnessed a slight increase of 0.02% to reach 105.31 level.
Source: Bears growl! Sensex crashes 750 points, Nifty below 21,850