Monday blues: Stock markets slump as global uncertainties weigh on

• On Monday, Sensex fell 616 points to close at 73,502, Nifty fell by 160 points to 22,332.
• Nifty Bank fell by 507 points and BSE Bankex shed 607 points.
• Uncertainties around global interest rate cuts and geo-political tensions affected investor sentiment.
  

Indian benchmark indices closed in the red on Monday, after rallying for the last two sessions. The markets opened red, but steep selling was seen at the fag-end of the trading session, as global uncertainties impacted investors’ sentiments.

Sensex fell 616 points to close at 73,502, while Nifty fell by 160 points to 22,332 on Monday. In its last trading session on Thursday, Sensex had settled at a new peak of 74,119 while Nifty also closed near a record of 22,493.

“Weak global cues contributed to the overall weakness as local investors cut their exposure to banking, telecom, power and realty stocks. The market is in a volatile phase due to uncertainty over global interest rate cut, geo-political tensions and sluggish growth in key economies, which is forcing investors to cash out of their investments at regular intervals,” said Prashanth Tapse, senior VP of research at Mehta Equities.

Almost all sectoral indices closed in the red, led by banking stocks. Nifty Bank fell by 507 points and BSE Bank shed 607 points. Nifty Financial Services also fell by 143 points.

Tata Consumer, Power Grid, Bajaj Auto, Tata Steel and SBI were the top losers on Nifty. Apollo Hospital, Nestle, SBI Life, Cipla and Dr Reddy’s were the top gainers in the index.

A lot of Tata group stocks closed in the red on Monday, with Tata Chemicals shedding around 10%. Tata Power and Tata Technologies also closed in the red while TCS closed flat.

‘Investors on the edge’

The US markets had closed in the red on Friday and also opened in the red on Monday. Tech-heavy index Nasdaq is down by over 1.1% as of 4 pm, and the S&P 500 is down by over 0.6%.

"Continued selloff in global markets due to uncertainty over rate cuts impacted the domestic market sentiment, which is currently at an overbought level. The stronger than expected US nonfarm payroll data and caution ahead of the release of US inflation data tomorrow kept investors on the edge," said Vinod Nair, Head of Research, Geojit Financial Services.

Gold prices hit a fresh new high on Friday and the bullion’s prices have been rising in the futures contracts too. Gold prices on Monday rose ₹73 to ₹66,096 per 10 grams in futures trade as speculators created fresh positions on a firm spot demand. “The broader market continued its underperformance due to valuation concerns, while investors are rebalancing their portfolios to include safe haven assets like gold,” said Nair.

Brent crude prices too went up marginally by 0.37% to $81.8 per barrel.

(With inputs from PTI)