Indian markets bleed: Sensex, Nifty plunge on weak monsoon, global cues

Indian stock markets plummeted in the final hour of trading, with the Sensex dropping over 1,000 points and Nifty falling 1.5%. The sharp sell-off was attributed to weak monsoon forecasts, MSCI rebalancing, and global geopolitical concerns.

Indian stock markets witnessed a sharp sell-off in the final hour of trading on Friday as investors reacted to weak monsoon forecasts, MSCI rebalancing, and global geopolitical concerns. The Nifty 50 fell 359 points, or 1.5 per cent, to close at 23,547, while the Sensex dropped 1,092 points to end at 74,775.

Selling pressure was seen across most sectors, except IT, which gained 0.6 per cent. Oil & Gas, Metal, and Auto stocks were among the biggest losers, each falling around 2 per cent.

Market Drivers: Domestic and Global Factors

Commenting on the slide, Mahesh M Ojha of KC Securities said the market witnessed selling pressure due to domestic triggers. "Monsoon prediction is not good. Met predicted 50-60 per cent low monsoon," he noted. "However, the global event has already put selling pressure, and in the last half an hour, the MSCI Rebalancing impact is also visible. So, not all factors are positive, hence we face some selling pressure in the market."

Market anxieties were further compounded by shifting geopolitical headlines. Highlighting the global factors weighing on the market, Ojha pointed to breaking international reports that underscored ongoing diplomatic uncertainty. "Vance says that President Trump is not yet ready to endorse the Iran agreement," Ojha cited a France-based news agency, noting that the political impasse has left investors increasingly cautious.

Wall Street Hits New Highs

The weakness in India contrasted with a strong overnight session on Wall Street. All three major US indices finished at new closing records on Thursday, boosted by a rally in the technology sector. The S&P 500 rose 0.58 per cent, while the Nasdaq Composite gained 0.91 per cent, with both indexes also notching new intraday all-time highs. The Dow Jones Industrial Average eked out a gain of 0.05 per cent.

Commodities and Asian Markets

Commodities were mixed. Brent Crude traded at USD 91.23 as of 15:30 IST, down 1.58 per cent on the day, with the day's range between USD 90.67 and USD 92.80. Gold was at USD 4,530.07, up 0.77 per cent. Asia-Pacific markets, however, shrugged off Iran-related tensions and followed Wall Street higher. South Korea's Kospi jumped more than 3 per cent to close at 8,476.15, hitting a new intra-day high before paring gains slightly. The small-cap Kosdaq was down 2.68 per cent to 1,074.8. Japan's Nikkei 225 was up 2.53 per cent, ending the trading day at 66,329.5, while the Topix rose 1.41 per cent to a new record high of 3,957.17.

Technical Analysis

Meanwhile, Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, said, "Nifty traded in a descending triangle-like pattern during the first half of the session before witnessing a breakdown and drifting lower through the day to close at 23,548, down 1.58 per cent."

He further noted that on the daily chart, Nifty once again failed to close above its 50-day EMA and formed a sizeable bearish candle with a noticeable upper wick, highlighting the Index's inability to sustain at higher levels. "Notably, this marks the third consecutive session where the Index has formed a pronounced upper wick, indicating persistent profit booking at higher levels," Shah added.

Shah pointed out that the Midcap Index formed a bearish engulfing candle pattern on the daily chart, completely engulfing the previous session's candle. "This pattern has emerged after a strong up move of a little over 5 per cent in the last eight sessions. However, confirmation in the form of a lower close would be required to signal any potential trend reversal," he said.

The Smallcap Index relatively outperformed its peers. It formed a sizeable bearish candle with indecision candles in the previous two sessions, indicating a lack of strong follow-through buying interest in the Index and inability to sustain at higher levels. The market breadth remained weak as the advance-decline ratio was tilted in favour of bears at the day's close. A total of 364 stocks out of the Nifty 500 universe ended in the red. (ANI)

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