On Monday, the Indian stock market closed with a significant decline. The Sensex and Nifty indices fell by more than 1%, with shares of large banking companies contributing the most to this correction.
The Sensex dropped by 900 points, closing at 73,853, while the Nifty fell by 250 points, reaching 22,900. As a result of this sharp decline, investors' stock value decreased by 500 billion rupees, and the market capitalization of companies listed on the BSE fell below 468 billion rupees.
Among the notable falling stocks were Axis Bank, which closed down 4%, as well as Infosys and Bajaj Finance, whose quotes fell to 3%. Shares of Trent, NTPC, HDFC Bank, HUL, and Bajaj Finserv fell by more than 2%. A significant decline was also observed in the small and mid-cap segments.
The Nifty Midcap 100 and Nifty Smallcap indices also closed with a 1% drop. Meanwhile, the India VIX market volatility index, which measures market fluctuations, rose by more than 4%, approaching the level of 14.7. Sectors were also affected: Nifty Private Bank fell by 2%, while Nifty FMCG, Nifty Financial Services, Nifty IT, Nifty Realty, and Nifty Consumer Durable all declined by more than 1%.
The market decline was accelerated by the fall in the share prices of major players, especially Axis Bank and HDFC Bank. After publishing its second-quarter results, Axis Bank's shares fell by more than 5%, and HDFC Bank's shares dropped by more than 2%.
Negative trends are observed globally. Although the price of Brent crude oil fell by more than 2%, it remains at a high level compared to last week, trading at $107 per barrel. WTI crude oil also exceeds $100 per barrel, increasing the risk of global inflation growth.
The negative impact is not only felt in the Indian market; Japan's Nikkei fell by 0.64%, Indonesia's market declined by 5%, and KOSPI showed a drop of more than 2%. Furthermore, there was also a sharp decline in the US market on Friday.
Foreign institutional investors were net buyers on Friday, purchasing shares worth 1166 crore. However, this purchase came after a period of significant selling throughout the month. Over 11 trading sessions this month, FIIs made the largest number of sales in 9 sessions.
Last week saw a rise of 2.8%, creating a certain momentum, and some better-than-expected results were presented, especially in the IT and banking sectors. Nevertheless, concerns remain regarding rising crude oil prices due to the situation in the Strait of Hormuz. Experts warn that if the oil price exceeds $109, tensions could increase. Technical analysis of the Nifty chart shows that it is near the 23,000 level, with support and resistance levels set at 22,950 and 23,300.