Stock markets retreated Monday as global trade war concerns snapped a brief recovery rally, with the benchmark Sensex falling 217.41 points or 0.29 per cent to close at 74,115.17, while the Nifty 50 dipped 92.20 points or 0.41 per cent to end at 22,460.30.
The indices began the session on a positive note, with Nifty reaching an intraday high of 22,676 before encountering resistance at the 20-day Exponential Moving Average. However, selling pressure intensified in the second half of trading, dragging the market lower amid renewed concerns over global trade tensions and weak cues from Asian markets.
Power Grid emerged as the top gainer on the NSE, rising 3.02 per cent to close at 271.25. Other gainers included Hindustan Unilever, which advanced 1.90 per cent to 2,246.50, Infosys up 0.83 per cent to 1,700.05, Nestle India gaining 0.38 per cent to 2,247, and ITC edging up 0.22 per cent to 404.80.
On the downside, ONGC led the losers, falling 4.12 per cent to 223.29, followed by Trent dropping 4.11 per cent to 4,794.45, IndusInd Bank declining 3.71 per cent to 901.95, Bajaj Auto slipping 2.61 per cent to 7,377, and Eicher Motors down 2.51 per cent to 4,972.50.
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“Global headwinds continue to drag the market sentiment, with the rise in US unemployment rates and tariffs leading to uncertainty, indicating that volatility is here to stay for the near term,” said Vinod Nair, Head of Research, Geojit Financial Services. “The domestic macros are favouring investors to start accumulating the beaten-down stocks with caution in the short term, while the long term appears attractive.”
Broader markets underperformed the benchmarks significantly, with the Nifty Midcap 100 and Nifty Smallcap 100 indices falling approximately 1.53 per cent and 1.97 per cent, respectively. Market breadth remained decisively negative with 2,877 stocks declining against 1,203 advances on the BSE, while 149 remained unchanged.
Sectoral performance was predominantly negative, with only FMCG managing to stay in positive territory. Realty, PSU Banks, Energy, and Auto sectors were among the worst performers, declining between 1-2 per cent.
IndusInd Bank shares dropped sharply after the Reserve Bank of India granted CEO Sumant Kathpalia only a one-year extension, instead of the three-year term recommended by the board. The stock has lost 42.45 per cent over the past year.
Technical analysts noted the breach of key support levels. “Nifty breached the critical support level of 22,500, which it had been holding in recent sessions, signaling potential weakness ahead,” observed Sundar Kewat, Technical and Derivatives Analyst at Ashika Institutional Equity.
The volatility index, India VIX, surged by 3.82 per cent to 13.99, indicating rising market uncertainty. Additionally, 129 stocks hit their 52-week lows, while only 75 stocks reached 52-week highs.
“Markets gave up the morning gains as weak global cues led by tariff uncertainty weighed on the indices with US President Trump, in a weekend interview, indicating a firm go ahead with reciprocal tariffs from April despite near term risks,” said Satish Chandra Aluri from Lemonn Markets Desk.
The Indian rupee weakened considerably, depreciating by 46 paise to settle at 87.33 against the US dollar, adding to investor concerns. “With rupee depreciating sharply and foreign fund outflows showing no signs of cooling off, markets may continue to exhibit volatility,” cautioned Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd.
Investors are now closely watching for upcoming economic indicators that could influence market direction. “A slew of economic indicators this week, US and India CPI data, will be keenly watched by investors for any ease in the current volatility,” Nair added.
According to Ajit Mishra, SVP of Research at Religare Broking Ltd, “For the market to surpass the short-term resistance of the 20-day EMA at 22,700, a fresh catalyst is needed. However, mixed global cues and the underperformance of the banking index remain key hurdles.”
Looking ahead, analysts suggest maintaining a cautious stance. “Until the index sustains above the 22,800 hurdle, traders are advised to buy near support and book profits around the resistance zones,” recommended Hrishikesh Yedve of Asit C. Mehta Investment Intermediates Ltd.
