Indian Equity Benchmarks Extend Sell-Off Amid Geopolitical Uncertainty

On Monday, the Indian equity benchmarks Sensex and Nifty opened sharply lower, extending Friday's sell-off. The Sensex was down 1,187 points, or 1.5 percent, at 80,100.2, while the Nifty fell 341 points, or 1.4 percent, to 24,837, slipping decisively below the crucial 25,000 mark.

The weakness in the market was triggered by a surge in crude oil prices amid heightened geopolitical uncertainty. Brent crude was trading near $76 a barrel, still elevated from recent levels. This has revived concerns around inflation, fiscal pressures, and global growth. Market breadth was sharply negative, with 2,551 shares declining against just 363 advances on the NSE.

Asian markets were broadly lower, while US equity-index futures were also in the red, reflecting a global shift toward risk-off positioning. India VIX jumped nearly 15 percent to 15.73, signaling a sharp rise in volatility expectations.

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According to Shrikant Chouhan, Head of Equity Research at Kotak Securities, the Nifty has decisively broken below its 200-day SMA near 25,300, indicating weakness in broader sentiment. The immediate level to watch is 25,000, with a sustained move below this mark potentially increasing pressure.

Bank Nifty also opened weak, trading below 60,000 in early deals. The index faces support in the 60,200-60,300 zone, with resistance seen at 60,800-60,900.

The rise in crude weighed on aviation, auto, paint, and other energy-intensive sectors. InterGlobe Aviation fell nearly 5 percent, Larsen & Toubro slipped over 3 percent, while Maruti Suzuki and Asian Paints also declined sharply. Realty stocks were among the worst hit, with the Nifty Realty index down nearly 4 percent.

On the other hand, ONGC gained nearly 4 percent, emerging as one of the top Nifty gainers, as higher crude prices could boost upstream realisations. Bharat Electronics and Hindalco also showed relative resilience.

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Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments, stated that the energy risk arising from crude remains the key market variable. He advised investors to use weakness to gradually accumulate high-quality stocks in domestic consumption themes such as banking, automobiles, capital goods, and defence.

Foreign institutional investors had sold equities worth Rs 7,536 crore in the previous session, while domestic institutions bought over Rs 12,000 crore, providing partial support.