India's benchmark indices ended sharply lower on Monday, with Nifty falling 207 points or 0.9% to close at 23,842 and Sensex declining 702 points or 0.9% to end at 76,847. According to reports from The Economic Times, both indices had declined as much as 2% during the day before recovering from their intraday lows. The market recovery was largely attributed to short covering and value buying at lower levels, as traders covered some of their bearish bets ahead of the financial markets holiday on Tuesday.
The primary driver behind the market decline was the surge in oil prices, with Brent Crude June Futures up 7.3% to $102.2 a barrel on Monday evening. As reported by The Economic Times, the escalation in the US-Iran conflict after negotiations fell through over the weekend and Donald Trump announced fresh blockades around the Strait of Hormuz kept gains at bay in India as well as most other Asian markets. The India Volatility Index (VIX) jumped 8.75% to 20.5 levels, indicating heightened caution in the truncated trading week.
According to technical analysts, Nifty faces strong resistance around the 24,300 level, with gains expected to be capped at current levels. As reported by The Economic Times, Bhavya Shah, technical research analyst at Stoxbox, noted that the index's hurdles could spark selling pressure at 23,850-23,900 levels. However, a sustained move above 24,200 could open the way for further gains toward 24,850, while a fall below 23,600 may lead to a sharper decline toward 23,100.
The broader market indices also declined, with Nifty Midcap 150 dropping 0.6% and Nifty Small-cap 250 falling 0.4% on Monday. According to The Economic Times, Foreign portfolio investors net sold shares worth ₹1,983 crore, while Domestic institutions were buyers worth ₹2,432 crore. The divergent flows highlight the cautious sentiment among foreign investors amid the geopolitical tensions and oil price volatility.
