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FPI selling, weak earnings drag equity markets to three-month lows
banking and IT heavyweights.
The Sensex plunged 572 points (0.7 per cent) to close at 80,891, while the Nifty fell 156 points (0.6 per cent )to 24,681. The selloff erased ₹3.8 trillion from the total market capitalisation of BSE-listed firms, now at ₹448 trillion. Monthly losses stand at ₹13.3 trillion, with both benchmarks down nearly 6 per cent from September peaks.
Investors were wary of taking positive bets amid reports that trade talks between India and the US remained deadlocked and dimmed hopes of an interim deal before US President Donald Trump's deadline. On the contrary, the deal between the US and EU eased concerns of a bigger trade tiff that could have hurt the global economy.
US President Donald Trump and European Commission President Ursula von der Leyen announced a trade deal on Sunday, which will see the bloc face 15 per cent tariffs on most of its exports.
FPIs were net sellers on Monday, worth approximately ₹ 6,083 crore, marking their sixth consecutive day of selling and the largest single-day sale since May 30.
Kotak Mahindra Bank was the largest contributor to the decline in the Sensex, followed by Bharti Airtel and Bajaj Finance. Kotak Mahindra Bank's shares declined 7.5 per cent, their biggest one-day fall since April 25, 2024, after the private lender posted a 40 per cent year–on–year (Y-o-Y) decline in its consolidated net profit to ₹4,472 crore in the April–June quarter.
A rise in provisions and contingencies due to higher slippages also weighed on profits for the recently concluded quarter.
TCS ended the session with a loss of 1.76 per after it announced on Sunday that it would lay off approximately
2 per cent, or around 12,260 employees, of its global workforce of 613,069 this financial year.
"Domestic market sentiment has remained cautious, weighed down by a disappointing set of Q1 earnings, delays in the India-US trade agreement, and continued FII outflows. In contrast, global markets remain broadly positive, supported by US-EU trade developments that are perceived as less concerning than anticipated,' said Vinod Nair, head of research of Geojit Investments.
In the future, the remainder of corporate earnings and the trajectory of the trade deal with the US will determine the market movement.
"Markets are currently grappling with headwinds on both domestic and global fronts. In the banking space, earlier resilience had helped limit the decline; however, renewed pressure across the sector — except for heavyweights ICICI Bank and HDFC Bank — is adding to participants' concerns. We now view the 24,450 – 24,550 zone as a critical support area, while the 24,900 – 25,000 range is likely to act as a resistance zone in case of a rebound. Traders should maintain a cautious stance and adjust their positions accordingly,' said Ajit Mishra, SVP-Research of Religare Broking.
Market breadth was weak with 2,951 declines and 1,200 advances.
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