Benchmark stock indices suffered a significant decline on Monday, with the S&P BSE Sensex tumbling 1,165.74 points to 78,057.37 and the NSE Nifty50 shedding 366.85 points to settle at 23,637.90 as of 12:02 PM.
The sharp downturn was led by losses in PSU banking stocks and a broader market sell-off, with all sectoral indices on the Nifty trading in red. The Nifty PSU Bank index saw the steepest fall of 3.63%, while Nifty Smallcap100 and Nifty Midcap100 declined by 2.50% and 2.23%, respectively.
Market volatility spiked sharply, with the Nifty50 volatility index reaching 13.20. Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, attributed the slump to external macroeconomic conditions. “The external macro construct continues to be unfavourable with the dollar index at 109 and the 10-year US bond yield at 4.62%. The FIIs are likely to continue selling till the yields decline and the dollar stabilises,” said Vijayakumar.
He noted that despite negative external factors, domestic segments remained resilient. “Domestically, the December auto numbers indicate that the much-talked-about urban demand deceleration is exaggerated. Buying will resume in these resilient domestic segments, supporting the market on declines,” he added.
Among the sectoral indices, Nifty Metal plunged 2.98%, Nifty Realty dropped 2.77%, and Nifty Financial Services Ex-Bank fell 2.31%. Banking stocks bore heavy losses, with Nifty Private Bank and Nifty Bank slipping by 1.89% and 1.88%, respectively.
Other indices mirrored the selling pressure, including Nifty Oil & Gas (-2.45%), Nifty Auto (-2.05%), Nifty Pharma (-1.33%), and Nifty FMCG (-1.53%). The IT sector also felt the impact, with Nifty IT declining by 0.60%.
The downturn coincided with reports of two Human Metapneumovirus (HMPV) cases detected in Bengaluru. Both cases involved infants with no history of international travel. The HMPV scare is believed to have added to investor jitters, exacerbating the market sell-off.
The broader market sell-off highlighted the growing concerns among investors as they continue to navigate volatile global and domestic cues.
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