India’s benchmarks Nifty and Sensex declined by over 1% on Monday for the ninth time this year, as incessant foreign capital outflows and weakness in global markets hit investor sentiment.

If the decline continues through the session, it will mark the fifth consecutive day of losses for both indices.

The NSE Nifty 50 and the BSE Sensex have fallen 13.7% and 12%, respectively, from the September 2024 peak, triggering the worst fall since 2020. Indian stocks’ overall market cap has plunged nearly $1.2 trillion since the peak last year to $3.99 trillion, according to Bloomberg data.

Weak Global Markets

Indian stocks are mirroring their Asian peers which fell after Wall Street saw its worst session of the year on lackluster US economic data. On Friday, both the S&P 500 and the Dow Jones Industrial Average slipped 1.7%. The Nasdaq Composite slid 2.2%.

Manufacturing activity slowed in the world’s largest economy as the US Composite PMI declined to 50.4 in February from 52.7 in January, marking the lowest level since September 2023.

Inflation expectations surged to a near 30-year high, while consumer sentiment declined more than anticipated.

Japan’s Nikkei 225 dropped 1.4% and South Korea’s Kospi fell 0.6% in early Monday trade. Chinese equities in Hong Kong and Shanghai both tanked.

FPI Selling

In February so far, the foreign portfolio investors have net offloaded equities worth Rs 23,710 crore, according to data from the National Securities Depository Ltd. This was preceded by net selling of Rs 78,027 crore in January.

In 2025 so far, they have sold equities worth Rs 1.01 lakh crore, the NSDL data showed.

On Friday, FPIs stayed net sellers for the third straight day as they net offloaded stocks worth approximately Rs 3,449 crore.

Among the reasons for the outflows are global tariff uncertainty, capital pivot towards China and a strong dollar making Indian equities less appealing.

Small And Mid-Caps Down

The Nifty Smallcap 250 lost over 2% while the Nifty Midcap 150 fell 1.8% intraday on Monday, faring worse than the benchmarks.

Reduction in earnings estimates for large-cap companies has ended, Venkatesh Balasubramaniam, MD and co-head of research at JM Financial Institutional Securities Ltd. told NDTV Profit.

He said 5-7% further correction can occur in the broader market. “This year is not to make money but to save money. I don’t think correction in small- and mid-caps is over,” he said.

While the smallcap index is down 18% so far this year, midcaps have shed 13%.

. Read more on Markets by NDTV Profit.The key reasons for the sharp slide in the markets are weak global cues, FPI selling, and a correction in broader markets.  Read MoreMarkets, Business, Notifications 

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