Indian markets tumble as BSE Sensex drops 271 points; Nifty slips below 25,000

Indian equity markets experienced a downturn on Monday, with the BSE Sensex closing down 271.17 points at 82,059.42 and the Nifty 50 slipping 74.35 points to 24,945.45. This decline marks the second consecutive day of losses, primarily driven by selling in IT stocks following a Moody's downgrade of the U.S. credit rating.

The downgrade has raised concerns among investors, leading to a cautious sentiment in the market. Prashanth Tapse, Senior V-P (Research) at Mehta Equities Ltd, noted, “Markets languished in negative territory for major part of the trading session as weak Asian and European indices resulted in investors resorting to profit-taking in IT, capital goods and oil & gas shares.”

Despite the overall decline, foreign institutional investors (FIIs) continued to show interest, buying equities worth Rs 8,831.05 crore on Friday, indicating a mixed sentiment in the market. However, the volatility index, India VIX, jumped nearly 5%, reflecting cautious market sentiment.

Sector-wise, IT stocks suffered the most, while realty stocks outperformed, extending their winning streak. Rupak De, Senior Technical Analyst at LKP Securities, mentioned that the index appears to be in a consolidation phase, which may continue for the next few days.

Overall, the market's performance reflects a complex interplay of global economic factors and domestic investor sentiment, with analysts keeping a close watch on upcoming economic data for further direction.

Indian equity markets fell on Monday, with the BSE Sensex dropping 271 points to close at 82,059.42 and the Nifty slipping below the 25,000 mark, primarily due to losses in IT stocks following a Moody's downgrade of the U.S. credit rating, which dampened investor sentiment.