Dalal Street experienced notable downward pressure during Monday’s afternoon session, resulting in a loss of over Rs 6.4 lakh crore in investor wealth due to heightened volatility and widespread selling. The significant decline was indicative of mounting apprehensions among market participants amid uncertain global and domestic conditions.
As of 12:57 pm, the collective market capitalization of BSE-listed companies plummeted from Rs 421.62 lakh crore at the previous close to Rs 415.25 lakh crore. The benchmark indices mirrored this negative trend, with the BSE Sensex shedding 1,098.02 points to reach 72,485.20, while the NSE Nifty50 dropped 319.15 points to 22,500.45.
Although there were initial attempts at recovery, the markets failed to sustain upward momentum after opening sharply lower. This highlighted a fragile market sentiment under the weight of various pressures. Volatility indicators also reflected nervousness, with the India VIX, known as the market’s fear gauge, surging over 5% during the session, indicating heightened uncertainty among investors.
The sell-off was widespread, led by declines in banking and financial stocks. Axis Bank witnessed a decrease of over 3.6%, while State Bank of India and Bajaj Finance each fell by more than 3%, exerting significant downward pressure on the indices. Other major companies such as Bharti Airtel, Larsen & Toubro, Infosys, and Kotak Mahindra Bank also registered losses, underscoring weakness across various sectors.
Amidst the overall risk-off sentiment prevailing among investors, there was widespread selling pressure in the broader market. Nevertheless, certain sectors displayed resilience, with oil and commodity-related stocks like ONGC and Coal India posting gains ranging from 1% to 2%, while Hindalco saw an increase supported by higher global commodity prices.
The primary catalyst for the sell-off was the sharp surge in crude oil prices, hovering around $115–116 per barrel due to escalating tensions in West Asia. Given India’s heavy reliance on oil imports, elevated prices contribute to a higher import bill, fuel inflation, and squeeze corporate margins, all of which negatively impact equity markets.
Foreign institutional investors continued to trim their exposure, further adding to the selling pressure amidst global uncertainties. Despite attempts at stabilization, the market sentiment remained weak. With crude oil prices remaining high and geopolitical risks persisting, ongoing volatility is anticipated in the near future.