Mumbai: Indian stock markets witnessed a sharp selloff on Monday, with the Sensex plunging 876.38 points, or 1.17 percent, to 73,852.90, while the Nifty 50 dropped 257.20 points, or 1.11 percent, to 22,888.95.
Heavy selling in banking stocks, weak global markets, elevated crude oil prices and rising volatility dragged benchmark indices lower.
Nearly Rs 5 Lakh Crore Wiped Out
The market crash erased nearly Rs 5 lakh crore of investor wealth during Monday’s session.
The combined market capitalisation of fell from Rs 473.47 lakh crore on Friday to Rs 468.50 lakh crore by 2:22 pm on Monday.
This represents a loss of approximately Rs 4.97 lakh crore, or 1.05 per cent, based on afternoon market data.
HDFC Bank Leads Banking Selloff
Banking stocks came under pressure, with HDFC Bank falling nearly 2 per cent following its second-quarter results.
Investors remained concerned about pressure on net interest margins and slower earnings growth.
Despite several brokerages maintaining positive views on the lender, banking stocks witnessed selling pressure. Bank Nifty declined around 0.5 per cent.
Weak Global Markets Hurt Sentiment
Negative global cues added to domestic market weakness.
Asian markets traded lower amid concerns over rising investments in artificial intelligence and pressure on technology stocks.
The MSCI Asian equity index declined 0.5 percent.
US markets had also ended Friday lower, with the Nasdaq falling 2.19 percent, S&P 500 declining 1.22 percent and Dow Jones slipping 0.55 per cent.
Crude Oil Remains Expensive
Brent crude declined 1.5 percent to USD 108.27 per barrel, while WTI slipped 0.6 per cent to USD 100.83.
However, elevated oil prices continued to worry investors amid geopolitical tensions and uncertainty over global supplies.
India VIX Signals Nervousness
India VIX, which measures expected market volatility, climbed nearly 4 per cent to 14.52.
Geojit Investments’ Chief Market Strategist Anand James said the Nifty’s recent move above its 20-day simple moving average indicated potential strength.
However, he cautioned that some correction was possible after the recent rally.
According to James, the Nifty could still move towards 23,600 if it avoids falling significantly below 22,780.
The Sensex touched an intraday low of 73,708.54, while the Nifty hit 22,845 before recovering slightly towards the close.