Indian Stock Markets End Financial Year 2025-26 on a Sour Note
Equity benchmark indices Sensex and Nifty concluded the final trading session of the 2025-26 financial year with significant losses on Monday. The ongoing conflict in West Asia and surging crude oil prices continued to dampen investor sentiment, leading to a broad-based sell-off across domestic markets.
Sharp Declines in Benchmark Indices
Extending losses for the second consecutive session, the 30-share BSE Sensex plummeted by 1,635.67 points, or 2.22 percent, to settle at 71,947.55. During intraday trading, it witnessed an even steeper decline, dropping 1,809.09 points, or 2.45 percent, to touch 71,774.13.
The broader 50-share NSE Nifty followed suit, slumping 488.20 points, or 2.14 percent, to close at 22,331.40. Over the last two trading sessions, the cumulative fall has been substantial, with the Sensex losing 3,325.9 points (4.41 percent) and the Nifty dropping 975.05 points (4.18 percent).
Key Drivers of the Market Downturn
Geopolitical tensions in the Middle East emerged as the primary catalyst for the market decline. These tensions dashed hopes of de-escalation and propelled crude oil prices higher, raising concerns about inflation and macroeconomic stability for oil-importing economies like India.
"The downturn was primarily driven by escalating geopolitical tensions in the Middle East, which pushed crude oil prices higher, raising concerns over inflation and macro stability for oil-importing economies like India," said Ajit Mishra, SVP of Research at Religare Broking Ltd.
Brent crude, the global oil benchmark, jumped 2.18 percent to $115.1 per barrel, exacerbating market worries.
Weak Global Cues and Foreign Fund Outflows
Weak signals from Asian markets and persistent foreign institutional investor (FII) outflows further pressured domestic equities. Foreign investors offloaded equities worth Rs 4,367.30 crore on the previous Friday, while Domestic Institutional Investors (DIIs) provided some support by purchasing stocks worth Rs 3,566.15 crore.
Notably, foreign investors have withdrawn approximately Rs 1.14 lakh crore (about $12.3 billion) from domestic equities in March alone, marking the worst monthly outflow. This exodus is attributed to escalating tensions in West Asia, a weakening rupee, and concerns over elevated crude oil prices.
Top Gainers and Losers
Nifty50 Top Gainers:
- Hindalco (2.05%)
- Coal India (1.22%)
- ONGC (0.96%)
- Power Grid (0.21%)
Nifty50 Top Losers:
- Bajaj Finance (-5.01%)
- Kwality Wall’s (-4.79%)
- SBI (-3.94%)
- InterGlobe Aviation (-3.81%)
- Bajaj Finserv (-3.72%)
- Axis Bank (-3.65%)
- Jio Financial Services (-3.64%)
- Adani Enterprises (-3.53%)
- Shriram Finance (-3.51%)
- Kotak Bank (-3.49%)
BSE Sensex Top Gainers:
- Power Grid (0.21%)
BSE Sensex Top Losers:
- Bajaj Finance (-5.01%)
- Kwality Wall’s (-4.79%)
- SBI (-3.94%)
- InterGlobe Aviation (-3.81%)
- Bajaj Finserv (-3.72%)
- Axis Bank (-3.65%)
- Kotak Bank (-3.49%)
- Bharti Airtel (-3.34%)
- HDFC Bank (-3.26%)
- Trent (-3.06%)
Broader Market and Sectoral Performance
The broader market mirrored the sharp sell-off, with 3,563 stocks declining, 876 advancing, and 154 remaining unchanged on the BSE. Broader indices also came under pressure, with the BSE MidCap Select index falling 3.13 percent and the SmallCap Select index declining 2.14 percent.
All sectoral indices ended in negative territory, with notable declines in:
- Auto, FMCG, consumer durables, capital goods, realty, private banks, and PSU banks, which dropped between 2 percent and 4 percent.
- The BSE PSU Bank index plunged 4.60 percent, followed by MidSmall Private Banks Quality Tilt (3.96 percent), Bankex (3.80 percent), Financial Services (3.46 percent), Private Banks (3.43 percent), BSE Top 10 Banks (3.40 percent), Telecommunication (3.09 percent), and Realty (3.03 percent).
"Banking stocks were among the key laggards following the RBI’s new restrictions on banks’ foreign exchange positions aimed at stabilising the rupee, which led to sharp declines across major private and public sector lenders," noted market analysts.
Expert Insights and Market Outlook
"While valuations now appear more favourable after the recent correction, the trajectory of earnings revisions remains the key determinant of market direction. Continued volatility in oil prices and rupee weakness may exert pressure on input costs, increasing the risk of near-term earnings downgrades," said Vinod Nair, Head of Research at Geojit Investments Limited.
"Indian equities extended their decline, with benchmark indices falling over 2 percent, underscoring a deepening sell-off sentiment driven by persistent global uncertainties and rising crude oil prices," added Hariprasad K, Research Analyst and Founder of Livelong Wealth.
Global Market Context
In Asian markets, South Korea's Kospi and Japan's Nikkei 225 plunged nearly 3 percent, while Hong Kong's Hang Seng index also ended lower. Shanghai's SSE Composite index was a rare bright spot, closing in positive territory.
European markets were trading marginally higher, but US markets had ended sharply lower on the previous Friday, with the Nasdaq Composite down 2.15 percent, the Dow Jones Industrial Average losing 1.73 percent, and the S&P 500 declining 1.67 percent.
Currency and Full-Year Performance
Meanwhile, the rupee gained 7 paise in a volatile session to close at 94.78 (provisional) against the US dollar, after hitting an all-time intra-day low of 95.22.
For the entire 2025-26 financial year, the Sensex declined by 5,467.37 points, or 7 percent, while the Nifty fell by 1,187.95 points, or 5 percent, reflecting the challenging market conditions driven by geopolitical and economic headwinds.
