Indian equities ended sharply lower on Monday, extending their losing streak to a fourth straight session as investors grappled with rising crude oil prices, escalating tensions in West Asia and persistent foreign fund outflows. Weak global cues and renewed selling in heavyweight banking stocks added to the pressure, dragging benchmark indices lower despite a positive start to the day.
The sell-off wiped out more than ₹4 lakh-crore in investor wealth, while broader market indices fell even more sharply than the benchmarks.
Sensex fell 508 points (0.68 percent) to close at 74,267
Nifty 50 declined 165 points (0.70 percent) to 23,383
Sensex has lost 2,220 points over the past four trading sessions
Nifty has shed nearly 650 points during the same period
Investor wealth eroded by ₹4.26 lakh-crore in a single session
BSE market capitalisation fell to ₹460.70 lakh-crore from ₹464.97 lakh-crore
The selling was more pronounced in the broader market, as investors shifted towards relatively safer large-cap stocks amid rising global uncertainties.
Nifty Midcap 100 dropped 1.45 percent
Nifty Smallcap 100 declined 0.88 percent
Market participants preferred quality large-cap counters while reducing exposure to riskier segments.
Fresh military action involving the US and Iran, along with continued hostilities in West Asia, revived concerns over the stability of the region and its impact on global trade and energy supplies.
According to reports, the US targeted Iranian radar and drone-control facilities after Iran allegedly downed an American military drone. Iran subsequently launched retaliatory strikes, raising fears that the conflict could widen despite ongoing diplomatic efforts.
The renewed tensions triggered a sharp rise in crude oil prices.
Brent crude climbed nearly 3 percent to around $94 per barrel
WTI crude rose 3.7 percent to about $90.5 per barrel
Higher oil prices are a major concern for India, which imports most of its crude oil requirements. Rising energy costs could increase inflationary pressures and widen the country's trade deficit.
Foreign institutional investors remained net sellers of Indian equities.
FIIs sold Indian stocks worth ₹21,940 crore during May, taking total outflows in 2026 so far to a record ₹2.47 lakh-crore. The sustained withdrawal of foreign capital has been one of the key reasons behind the market's underperformance this year.
Heavyweight banking and financial stocks remained under pressure, contributing significantly to the decline in benchmark indices.
Despite the near-term weakness, market participants are watching a few potential positive triggers:
Resumption of India-US trade negotiations
Possibility of an interim trade agreement between the two countries
Upcoming RBI monetary policy decision
Release of key GDP growth data
Analysts believe these developments could help improve investor sentiment if outcomes remain favourable.
Technical indicators suggest that market momentum remains weak. Nifty has broken below a parallel channel pattern and closed beneath the previous session's low, indicating continued bearishness. Momentum indicators such as RSI and ADX also point to seller dominance.
With crude oil hovering near multi-month highs, geopolitical risks unresolved and foreign investors continuing to pull money out of Indian equities, market sentiment is likely to remain cautious. Investors will closely track developments in West Asia, RBI policy signals and domestic economic data for clues on the market's next direction.
