Indian equity markets plunged sharply on Monday, as Sensex fell below 76,000 and Nifty50 dipped under 22,900, marking the second consecutive session of losses. At 11:26 AM, the BSE Sensex stood at 75,516.16, down 676 points (0.89%), while the Nifty50 dropped 218 points (0.96%) to 22,872.75.

The downturn was driven by weak corporate earnings, foreign portfolio investor (FPI) outflows, and uncertainties surrounding US trade policies. The indices also recorded their third straight weekly decline last Friday.

Key Market Movements and Sectoral Losses

Major losers: Zomato, IndusInd Bank, M&M, Adani Ports, Infosys, and Tata Steel saw losses of up to 2% in early trade.

Gainers: HUL, ICICI Bank, and TCS showed positive movement amid the broader market downturn.

FPI Outflows: Foreign investors have pulled $8.23 billion from Indian markets in January 2025, with $7.44 billion withdrawn from equities, marking the largest monthly outflow since October 2024.

Economic and Global Pressures

Investors remain cautious ahead of the US Federal Reserve's policy decision on Wednesday, with expectations of unchanged interest rates. However, the Fed’s commentary will be closely monitored, especially after Donald Trump’s renewed push for lower borrowing costs.

Markets are also reacting to escalating global trade tensions, particularly Trump’s threats to impose a 25% tariff on Colombia, Canada, and Mexico over trade and immigration disputes. These concerns have added pressure to global equities, including US futures and Asian markets, which also showed signs of weakness.

Rupee Weakens, Oil Prices Decline

The Indian Rupee depreciated by 22 paise, trading at 86.44 against the US Dollar, as the Dollar Index strengthened by 0.21% to 107.66.

Oil prices fell over 1% after Trump’s remarks on OPEC production policies, further affecting global energy markets.

Selective Gains in Indian Markets

Despite the broader market weakness, DLF shares surged 5% after reporting a 61% YoY increase in Q3 consolidated net profit to Rs 1,059 crore. Similarly, YES Bank gained nearly 3%, following a 164.5% rise in Q3 net profit to Rs 612.27 crore.

With the Union Budget scheduled for release later this week and Fed policy decisions looming, volatility is expected to persist. Traders and investors will closely watch policy signals from New Delhi and Washington for further market direction.