MUMBAI: The sensex slipped for the fifth session in a row on Monday. The index dropped 857 points, or 1.1%, to close at 74,454 – its lowest point in over eight months. Weak global sentiment and foreign fund outflows weighed on Indian markets. Analysts pointed to US tariff policies and trade tensions as key concerns.
The broader Nifty too shed 243 points, or 1.1%, ending the day at 22,553. American stocks had closed sharply on Friday, with the S& and Dow losing 1.7%, and the Nasdaq dropping 2.2% after US business activity hit a 17-month low, and inflation expectations climbed to 4.3% from 3.3%, according to a University of Michigan survey. Weak consumer confidence in the US also hit IT stocks.
“The market is more concerned about the likely American move to reciprocate higher tariff levies on exporting nations, which could impact developing countries, including India. Also, FIIs showing no signs of putting brakes on their India exit strategy continue to weigh heavily on markets, with expensive valuations driving investors to curb their equity bets here,” said Prashanth Tapse of Mehta Equities.
The selloff on Dalal Street on Monday was led by banking, IT, telecom, and metal stocks. Foreign institutional investors pulled Rs 6,287 crore from equities on Monday, bringing the total outflow this month to Rs 23,710 crore. Over five sessions, the sensex has shed 1,542 points (2%), while Nifty has lost 406 points (1.8%). Investors hae seen over Rs 4 lakh crore in wealth erased in a single day.
The downturn was broad-based. The BSE smallcap index lost 1.3%, while the midcap index declined 0.8%. Sectoral losses were led by IT, which fell 2.6%, followed by telecom (-2.3%), metals (-2.2%), and commodities (-1.5%). The auto and FMCG sectors posted gains.
Despite the recent selloff, Citi upgraded its outlook on Indian equities from ‘neutral’ to ‘overweight,’ forecasting that Nifty could rise to 26,000 by Dec, a 15% increase. The brokerage cited tax cuts, a recovery in public investment, and possible rate cuts as key drivers. RBI lowered rates by 25 basis points this month and further easing is expected.
Asian markets ended mostly lower, with declines in Seoul, Shanghai, and Hong Kong, while Tokyo remained closed for a holiday. European markets fared better, with Germany’s DAX gaining 0.7%. In commodities, Brent crude slipped 4 cents to $74.01, while the dollar strengthened against most currencies.