CHENNAI: Indian equities ended Monday’s session on a softer note after an initially firm opening, as profit-booking and sector-wide weakness dragged the benchmarks into the red. The Sensex fell a little over 330 points to close at 84,900, while the Nifty slipped below the psychological 26,000 mark and settled at 25,959. Both indices had opened with mild optimism, supported by steady global cues and early gains in information technology stocks, but the momentum faded quickly as the day progressed.
The early uptick in sentiment came from expectations that the US Federal Reserve may adopt a more accommodative tone in the coming months, a prospect that typically benefits export-oriented segments such as IT. However, the broader market struggled to find direction. Key domestic sectors that usually drive sentiment—such as real estate, metals, chemicals, FMCG and oil and gas—saw consistent selling pressure. Midcaps and smallcaps also weakened, reflecting cautious positioning across the board rather than isolated sector-specific adjustments.
Weakness in several index heavyweights added to the downward drift. Stocks in defence manufacturing and autos, including large names that had recently risen sharply, came under pressure. The pullback in these influential counters weighed on the benchmarks and contributed to the market’s inability to hold above intraday support levels. The rupee, meanwhile, showed mild strength against the dollar, indicating that currency markets were more stable than equities on the day.
Traders attributed the reversal to a combination of factors. While global cues were mildly supportive, domestic investors appeared reluctant to chase prices higher after the market’s recent run-up. The Nifty’s inability to stay above the 26,000–26,100 zone raised concerns among technical analysts, many of whom consider this range crucial for sustaining upward momentum. As the index slipped below this threshold, it reinforced the sense that the market may be entering a consolidation phase.
The underlying narrative is that the market remains divided: export-focused sectors continue to benefit from global optimism, but domestic-demand-linked sectors have turned tentative. This divergence has made the rally narrow and selective, reducing conviction in a broad-based move higher. Investors are now watching for fresh catalysts, including domestic macro data, corporate commentary on demand trends and clearer signals from global central banks.
With foreign portfolio flows also showing signs of hesitation and institutional traders adopting a more guarded stance, the near-term outlook appears balanced but cautious. Unless new triggers emerge, the market may continue to move sideways with an underlying soft bias. The next phase of direction will likely be shaped by whether the benchmarks can reclaim and hold key levels, and whether more sectors begin to participate in the upswing rather than relying on a handful of outperformers.