Why the market is down today: Rising global risks and profit-booking hit equities

Mumbai: Indian benchmark indices remained under pressure on Monday as a wave of global risk cues, sustained foreign investor selling, and weakness across sectors dragged the markets lower.

The Sensex briefly reclaimed the 85,000 level but was still trading over 700 points down, while the Nifty fell below 25,950. Broader markets fared worse, with mid-cap and small-cap indices witnessing steeper declines.

Indian equity markets fell sharply on Monday as benchmark indices slipped amid rising global and domestic pressures. The Sensex declined more than 700 points, while the Nifty dropped below 25,950, with volatility remaining elevated through the afternoon session. Broader markets mirrored the weakness, with both mid- and small-cap indices registering steeper losses.

Why are markets down today?

Analysts pointed to global uncertainty as the primary trigger for the downturn. Investors remain cautious ahead of clarity on US Federal Reserve rate cuts, while weak sentiment across Asian markets intensified the sell-off. Market experts noted that valuations had become stretched after the recent rally, making equities more vulnerable to negative cues and profit-booking.

Foreign institutional investor (FII) selling added further pressure. The continuing depreciation of the rupee has encouraged FIIs to offload positions in Indian equities. Strategists also flagged the recent jump in Japanese bond yields as a fresh global risk, with the potential for unwinding of the yen carry trade increasing the likelihood of outflows from emerging markets, including India.

Which sectors and stocks are falling today?

All major sectoral indices were in the red. PSU banking, realty, energy, FMCG and metal stocks saw the deepest cuts, with the Nifty Realty index falling more than 3.5%. Mid-tier stocks recorded significant declines, with Interglobe Aviation, DLF, Canara Bank, PNB, Bharat Electronics, Siemens and Adani Power among the top large-cap losers.

On the other hand, gains were limited to a handful of IT and large-cap names such as HDFC Life, Wipro, Tech Mahindra, Infosys and HCL Tech, which managed modest upticks despite the broader market slide.

What is the market outlook now?

Despite the day's sell-off, analysts highlighted that India's macroeconomic backdrop remains supportive. The economy posted 8.2% GDP growth in the second quarter, and the Reserve Bank of India recently raised its FY26 GDP growth projection to 7.3%. Although lower inflation has contributed to softer nominal GDP and near-term earnings, leading indicators suggest corporate earnings growth of around 15% in FY27.

In the near term, however, heightened volatility is expected to persist as global monetary uncertainty, currency weakness, FII outflows and external yield movements continue to influence risk appetite on Dalal Street.