Indian equity markets experienced a significant downturn in Monday's afternoon session, with benchmark indices extending losses. The India VIX, a key gauge of market volatility, climbed sharply, reflecting increased investor apprehension.
Volatility Spikes Amid Global Concerns
The India VIX surged by 6.17% to reach 11.34, up from its previous close of 10.68. This spike in the volatility index coincided with a broader market sell-off on Dalal Street. The Sensex tumbled 485 points to 76,033, while the Nifty 50 fell 146 points to settle at 23,752 by 1:08 pm IST.
Global investor sentiment was dampened following warnings from Iran directed at the United States. Iran's Parliament speaker, Mohammad Baqer Ghalibaf, stated that any further attacks on Iran's interests or security would be met with a “faster, heavier and more painful response,” escalating geopolitical tensions and triggering risk aversion across international markets.
Market Capitalization Declines, Key Stocks Hit
The widespread losses resulted in a significant drop in the market capitalization of BSE-listed firms, which collectively fell to Rs 486.19 lakh crore during afternoon trading. Major IT stocks like Infosys, Tech Mahindra, HCL Technologies, and TCS, alongside blue-chips such as Maruti, PowerGrid, ICICI Bank, BEL, and L&T, registered notable declines, falling up to 3.56%.
Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, noted the weak start to the week: "The frontline indices began the week on a weak note, slipping to their lowest levels in more than six weeks amid subdued market sentiment." Shah added that if the Nifty dips below 23,650, the next support lies in the 23,520-23,500 zone. Conversely, a surge above 23,900 could see the index rally towards 24,050. For the Sensex, support is identified at 75,700 and resistance at 76,500.
In commodities, Brent crude oil prices were trading near the $98 per barrel mark, reflecting ongoing global economic and geopolitical pressures.