Stock market crash preceded Jio's IPO: Sensex and Nifty indices fell, IT stocks suffered

Significant fluctuations were observed in the stock market on Monday. The start of trading surprised traders as both indices initially plummeted, but half an hour into the trading session, the situation changed drastically, and Sensex and Nifty began a rapid ascent, recovering from their fall.

The BSE Sensex, which opened at 72,990, fell compared to last Friday's close of 73,123, beginning its descent. In just five minutes, the index lost 609 points, reaching 72,514. However, after half an hour of trading, the direction of movement reversed, and the decline turned into a rise. By the time of writing, this index had risen by more than 360 points, trading at 73,491.

The NSE Nifty demonstrated similar dynamics. After an initial decrease, it also returned to a growth trajectory. This index, composed of 50 stocks, opened at 22,524, lower than the previous close of 22,600, and then dropped by 213 points to 22,387. Following the rise of the Sensex, it also started to grow, showing an increase of more than 60 points by the time of publication, trading at 22,659.

The Indian stock market experienced a sudden and significant decline on Monday. The Sensex index lost about a thousand points, while the Nifty also fell by approximately 300 points.

By 1:30 PM, the Sensex had dropped by 930.80 points or 1.25%, reaching 73,798.47, while the Nifty closed at 22,867.75, showing a fall of 278.40 points or 1.20%.

Out of 30 stocks listed on the BSE, only 4 showed a slight increase, while the remaining 26 experienced a substantial drop. HDFC Bank contributed the most to the decline, with its shares falling by approximately 3%. This was followed by Axis Bank, which fell by about 4%, Infosys by 3%, as well as stocks like Trent, HDFC Bank, Hindustan Unilever, and Bajaj Finance, which decreased by more than 2%.

Investor losses amounted to 400 billion rupees

This sharp downturn led to a significant reduction in investor earnings. The market capitalization of BSE companies decreased from 472 billion rupees to approximately 468 billion rupees, corresponding to a loss of about 400 billion rupees.

Four reasons for the decline

1. Significant drop in banking stocks: Following the release of second-quarter results for the fiscal year 2027 by private banks, including HDFC Bank, bank stocks fell by 2%, and this bank entered the list of stocks with the largest losses in the Nifty 50. Furthermore, Axis Bank shares also fell by more than 4%; there was also a decline in the shares of Kotak Mahindra Bank and ICICI Bank.

2. Weak sentiment: The MSCI, the broadest index of the Asian stock market, declined by 0.5%. While the KOSPI of South Korea recovered from an initial fall and reached a gain of 0.2%, the Nikkei 225 futures of Japan dropped by 1.3%, the Hang Seng futures of Hong Kong fell by 0.2%, and the Shanghai Composite also dropped by 0.2%.

Additionally, the US market recorded a sharp decline on Friday as sales of AI-related IT stocks resumed, and crude oil prices continued to rise, which was also a blow to the Indian market.

3. High crude oil prices: Brent Crude fell by 1.5% to $108.27 per barrel, and WTI fell by 0.6% to $100.83 per barrel. Despite the drop on Monday, crude oil prices remained high, and the impact of geopolitical tensions persisted on market sentiment.

4. Rise in VIX in India: The fear index, or volatility index, rose by almost 4%, reaching 14.52, indicating increased uncertainty among investors.