Dalal Street is bleeding. After a massive crash on Friday wiped out a staggering ₹7.02 lakh crore of investor wealth, Indian markets are staring at a chaotic start today. Gift Nifty futures are flashing red and trading 87 points lower at 25,432. This signals that the bears are firmly in control and not done yet. Traders need to brace for high volatility as global cues turn sour and foreign investors press the sell button.
Wall Street And Asian Cues Signal Weak Start
The week is starting on a nervous note for equity investors. The Indian equity benchmarks are set to stage a gap down opening today. This follows a brutal session on Friday where the S&P BSE Sensex tumbled 1,048 points.
Global signals are not helping the sentiment either. Wall Street closed lower in its previous session. This has cast a long shadow over Asian markets this morning. Most major Asian indices are trading on a subdued note.
Investors are worried about sticky inflation in the US and the path of interest rates. When the US markets sneeze, emerging markets like India often catch a cold. The Gift Nifty at GIFT City in Ahmedabad dropped to 25,432. This is a clear indicator that the Nifty50 will likely open below the key support levels.
Market experts suggest that the initial hour of trade will be crucial. If the Nifty fails to hold the 25,400 mark, we could see further downside. The selling pressure is broad and deep. It is not just limited to one sector.
Foreign Investors Trigger Massive Sell-Off
The biggest worry for the bulls right now is the relentless selling by Foreign Institutional Investors (FIIs). Data from the National Stock Exchange paints a grim picture of the cash market flows.
FIIs sold shares worth ₹7,395 crore on Friday alone. This is a massive outflow number that is hard for the market to absorb. When foreign money leaves at this pace, it puts immense pressure on the Rupee and large-cap stocks.
On the other hand, Domestic Institutional Investors (DIIs) tried to cushion the blow. They bought shares worth ₹5,554 crore. However, this buying support was not enough to counter the aggressive selling by foreign players.
Here is a quick look at the institutional activity from Friday:
| Category | Activity | Amount (₹ Cr) |
|---|---|---|
| FII (Foreign) | Sold | 7,395 |
| DII (Domestic) | Bought | 5,554 |
Net Outflow: The market saw a net institutional outflow despite strong domestic buying. This trend needs to reverse for the market to find stability. Until FII selling slows down, upside attempts will likely face stiff resistance.
Bank Nifty Defies Gravity With Strong Gains
Amidst the sea of red, there was one surprising pocket of strength. The banking sector refused to give in to the bearish sentiment. Nifty Bank actually jumped 1% to close at 60,669.35 on Monday.
This divergence is very interesting for traders. While the main benchmark indices crashed, banking stocks held their ground. This was largely driven by heavyweights like State Bank of India (SBI).
Key Banking Movers:
- State Bank of India: Surged 7.6%
- IndusInd Bank: Rose 2.76%
- Kotak Mahindra Bank: Gained 1.28%
Why is this happening? Banking stocks are often seen as a proxy for the domestic economy. The strong performance of SBI suggests that investors are still confident about credit growth in India. They are rotating money out of global-facing sectors like IT and metals and moving it into domestic banks.
If Bank Nifty continues to hold above 60,000, it could act as a major support for the broader market. Traders should watch if this sector can lead a recovery later in the day.
AI Disruption Fears Hammer Tech Stocks
The epicenter of the current market fall lies in the technology sector. IT stocks faced heavy pounding on Friday. This was one of the main reasons why investor wealth eroded by ₹7.02 lakh crore in a single day.
There is a growing fear about AI-led disruption. Investors are worried that Artificial Intelligence could hurt the traditional business models of Indian IT service companies. A weaker-than-expected earnings season has added fuel to this fire.
Major IT giants saw their stock prices tank as funds reduced their exposure. The logic is simple. If clients in the US and Europe cut spending on traditional IT services to invest in AI, Indian firms might suffer.
This sentiment change is causing a repricing of the entire sector. Until IT companies can prove they are winners in the AI race, their stocks might remain under pressure. For now, the “Sell on Rise” strategy seems to be playing out in tech counters.
Commodity And Metal Stocks Lose Shine
It was not just technology stocks that faced the heat. The selling pressure was visible in metal and commodity stocks as well. This indicates a fear of a global economic slowdown.
When global growth slows down, demand for metals like steel, copper, and aluminum drops. This drags down the share prices of metal companies. The BSE Sensex hit an intraday low of 82,534.55 largely because these heavyweights fell in unison.
Traders should remain cautious. The volatility index is rising. This means price swings will be sharp and fast. It is better to wait for the market to settle in the first hour before taking fresh aggressive positions.
Watch the levels of 25,400 on Nifty and 82,500 on Sensex closely. A break below these could open the doors for a deeper correction. But if buying emerges at lower levels, we might see a dead cat bounce.
The Indian stock market is facing a perfect storm of negative global cues and heavy FII selling. Nifty is set to open lower around 25,432 levels. While the banking sector led by SBI is showing strength, IT and metal stocks are dragging the index down due to fears of AI disruption and global slowdown. Investors should trade cautiously today.
