Indian benchmark indices, Sensex and Nifty, experienced a significant dip in early trading on Monday, largely influenced by selling pressure on IT stocks and continuous outflows from foreign funds.
Market Opens Lower
The 30-share BSE Sensex started the week with a decline, dropping 232.93 points to reach 82,267.54 in early trade. This fall mirrored the performance of the broader NSE Nifty.
The 50-share NSE Nifty also saw a dip, going down by 71.4 points to stand at 25,078.45. This early morning slump set a cautious tone for the day’s trading.
IT Sector Leads the Decline
Among the Sensex constituents, several major IT companies were prominent laggards. Infosys, Tech Mahindra, and HCL Tech were notable contributors to the market’s downturn.
Other companies like Bajaj Finance, Bharti Airtel, and Asian Paints also saw their shares decline, adding to the overall selling pressure. However, some stocks managed to buck the trend, with Trent, Axis Bank, Mahindra & Mahindra, and NTPC registering gains.
Foreign Funds Pull Out
A significant factor contributing to the market’s weakness was the activity of Foreign Institutional Investors (FIIs). According to exchange data, FIIs offloaded equities worth a substantial Rs 5,104.22 crore on Friday, indicating a continued withdrawal of foreign capital from the Indian markets.
Expert Outlook on Market Trends
Market strategists are closely watching the situation. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, noted that the Nifty’s weak trend is primarily weighed down by the IT sector’s performance. He suggested this weakness could persist, especially given the significant FII selling activity from the previous trading day.
Vijayakumar also highlighted that the market is anticipating a potential US-India trade deal, possibly with a tariff rate of around 20 percent for India. Such a deal, if it materializes, could provide a much-needed sentimental boost to the market. However, any disappointment on this front could lead to further declines.
Global Market Snapshot
Looking at Asian markets, the picture was mixed. South Korea’s Kospi, Shanghai’s SSE Composite index, and Hong Kong’s Hang Seng were trading positively, while Japan’s Nikkei 225 index saw a decline. Meanwhile, US markets had closed lower on Friday, adding to the global cautious sentiment.
In commodity markets, global oil benchmark Brent crude showed a slight increase, climbing 0.17 percent to trade at USD 70.48 a barrel.
Recap of Friday’s Performance
The current week’s decline follows a bearish close on Friday. The Sensex had tanked 689.81 points, or 0.83 percent, to settle at 82,500.47. Similarly, the Nifty had dropped 205.40 points, or 0.81 percent, closing at 25,149.85, setting a precedent for Monday’s early trade.
- Indian benchmark indices Sensex and Nifty dropped significantly in early Monday trade.
- IT stocks were the biggest laggards, pulling down the market.
- Foreign Institutional Investors (FIIs) sold equities worth over Rs 5,100 crore on Friday, contributing to the slump.
- Analysts suggest market weakness may continue, with a potential US-India trade deal being a key sentiment driver.
The market remains sensitive to global cues and foreign investment trends, with investors closely watching for further developments.
