Indian equity markets extended losses for a second consecutive session on Monday, with investor wealth eroding by over ₹7 lakh crore as benchmark indices struggled to hold key levels amid cautious sentiment and last-minute selling pressure.

The BSE Sensex declined 331.21 points, or 0.39%, to close at 84,900.71, while the NSE Nifty 50 fell 108.65 points, or 0.42%, to settle at 25,959.50. During intraday trading, the Sensex dropped as much as 521.81 points to touch 84,710.11.

The overall market capitalization of BSE-listed firms stood at ₹469 lakh crore on Monday, down from ₹476 lakh crore on Thursday, November 20, marking a loss of ₹7 lakh crore over the two-day period. In the previous session on Friday, the Sensex had declined 400.76 points to 85,231.92, while the Nifty dropped 124 points to 26,068.15

Sectoral performance and key movers

Defense and industrial stocks led the decline, with Bharat Electronics falling 3.23%, followed by Mahindra & Mahindra, Tata Steel, UltraTech Cement, Bajaj Finserv, and Tata Motors Passenger Vehicles among the major laggards.

However, selective buying in technology stocks provided some support. Tech Mahindra gained 2.42%, while Infosys, Asian Paints, Adani Ports, Sun Pharma, and HDFC Bank closed in positive territory.

Market outlook and global factors

"After a range-bound positive session, the market closed with a decline in the last half hour, led by Monday expiry, as Nifty-50 indices could not survive above the key threshold of 26,000," said Vinod Nair, Head of Research at Geojit Investments Limited.

"Investor sentiment remained cautious, in anticipation of key event risk like delays in finalizing the interim US-India trade agreement."

Despite the domestic weakness, global markets remained optimistic on renewed expectations of a December Federal Reserve rate cut. Following comments from New York Fed President John Williams suggesting labor market weakness poses a greater threat than inflation, market odds of a December rate cut surged to around 65-75%, up from approximately 40% earlier.

Foreign institutional investors offloaded equities worth ₹1,766.05 crore on Friday, while domestic institutional investors provided support by purchasing ₹3,161.61 crore worth of stocks.

Brent crude, the global oil benchmark, dipped 0.98% to $61.95 per barrel.