Nifty Index Falls Below Key 24,000 Threshold, Raising Concerns of a Bear Market

Market Capitalisation Erodes by Rs 6 Lakh Crore as Stock Markets Decline for Third Straight Session

Stock markets in India declined for the third consecutive session on Monday, resulting in a market capitalisation erosion of Rs 6 lakh crore. The markets fell due to rising crude oil prices and escalating geopolitical tensions in West Asia following the failure of the US and Iran to reach a peace deal. The sell-off was further exacerbated by Prime Minister Narendra Modi's remarks on fuel conservation and import moderation, which analysts said weighed on investor sentiment.

Market Performance

The Nifty fell 360.30 points or 1.49 percent to settle at 23,815.85, while the Sensex tanked 1,312.91 points or 1.7 percent to close at 76,015.28. The benchmark indices have corrected sharply in the last three trading sessions since Thursday, with the Nifty falling more than 515 points, or over 2 percent, and the Sensex declining nearly 1,950 points, or 2.5 percent.

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Analysts believe that despite the correction, the market is still in a consolidation phase and not yet in a bear market territory. Ruchit Jain of Motilal Oswal Financial Services said that the breach of the 24,000 mark in the Nifty has raised concerns over near-term market sentiment amid geopolitical tensions and a spike in crude oil prices.

Market Analysis

Ruchit Jain of Motilal Oswal Financial Services noted that the current decline appears more like a corrective phase within the broader uptrend rather than the start of a full-fledged bear market. He said that the index is approaching a strong support zone in the 23,500-23,600 range, where buying interest could emerge. According to him, the 50-day exponential moving average near 24,300 is likely to act as an immediate hurdle on any pullback rally.

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Hariprasad K, Research Analyst and Founder, Livelong Wealth, said that the immediate trigger for today's weakness came after Prime Minister Narendra Modi's speech on May 10, which the market interpreted as a sign of mounting macroeconomic stress. Ajit Mishra, SVP, Research at Religare Broking, said that the market has once again approached the lower band of its consolidation range.

Sectoral Performance

Selling pressure remained broad-based, with most sectoral indices ending lower. Realty, energy, and auto stocks witnessed sharp declines, while defensive sectors such as pharma and FMCG showed relative resilience. Broader markets also remained under pressure, with both midcap and smallcap indices falling more than 1 percent each, reflecting weak investor sentiment.