Closing Bell: Market Ends With Deep Cuts; Sensex & Nifty Post Biggest Loss In 2 Months; Auto Stocks Drag

The Indian stock market faced a broad-based sell-off on Monday, recording the biggest losses in two months, as both the Sensex and Nifty ended the session deep in the red. A combination of profit booking, global uncertainties, and sectoral weakness led to a bloodbath on Dalal Street, with most major indices finishing in negative territory.

The benchmark BSE Sensex witnessed a significant drop of 1,272 points, closing at 84,300, while the NSE Nifty declined by 368 points to end at 25,811. This marked one of the most substantial single-day declines in the last two months, reflecting investor concerns and profit-taking in heavyweights like Reliance Industries (RIL), ICICI Bank, HDFC Bank, and Axis Bank, which were the biggest drags on the Nifty.

The broader market, while also facing selling pressure, managed to limit its losses to some extent. The Midcap Index slipped by 233 points, closing at 60,148, showcasing relative resilience by falling only 0.4% compared to the Nifty's 1.4% decline.

Among the worst-hit sectors were auto and realty stocks, with 40 out of 50 Nifty stocks ending in the red. Auto stocks experienced a sharp decline ahead of their monthly sales data release, with Hero MotoCorp and TVS Motors both tumbling by 4%. The Nifty Realty Index also extended its losing streak for the second consecutive session, with sectoral stocks plunging up to 5%.

Amid the market turmoil, the Nifty Metal Index managed to extend its gaining streak, supported by optimism regarding China's continued stimulus measures. NMDC shares stood out, rising for the eighth straight session and ending 4% higher, driven by a surge in iron ore prices.

Despite the overall market weakness, some midcap stocks demonstrated resilience. Trent and Bharat Electronics Limited (BEL), which were recently included in the Nifty index, witnessed profit booking and declined by 3% each. Meanwhile, AstraZeneca saw a jump of 12% following positive commentary from its management, bucking the trend in an otherwise sluggish market.

Profit booking emerged as a significant factor during Monday's trade, with PB Fintech falling 5% from its highs despite announcing a $100 million investment. Similarly, Reliance Infrastructure shares surged 4% following a favourable court ruling in an arbitration case.

The pharmaceutical sector saw mixed fortunes, with Aurobindo Pharma slipping up to 3% after the US FDA issued 10 observations for its Telangana unit. On the other hand, Shakti Pumps hit a 5% upper circuit after the company announced a proposal for a bonus issue.

Indian Oil Corporation (IOC) recovered 2% from its lows after the company announced the withdrawal of a proposed rights issue worth up to Rs 22,000 crore. Ola Electric saw its stock fall below Rs 100 for the first time since listing, ending the day 2% lower. Reliance Infrastructure emerged as a winner in the day's trade, rising 4% after a favourable ruling in an arbitration case.

The market breadth favoured declines, with the advance-decline ratio standing at 1:1, indicating that for every two stocks that gained, three ended in the red. This broad-based selling led to a massive erosion of wealth, as BSE-listed companies witnessed a market capitalisation loss of nearly Rs 3.50 lakh crore on Monday.

Despite the heavy sell-off, analysts believe that the market may soon find a support level, as investors await the monthly sales data from auto companies and other sectoral updates. However, global cues, particularly from China's stimulus measures and developments in the US Federal Reserve's monetary policy, will likely continue to impact market sentiment in the coming days.