Sensex, Nifty fall sharply: Why stock market is falling today

Indian equity benchmarks resumed their downward trend in Monday's trade after a brief one-day pause, weighed down by global uncertainties, sustained foreign fund outflows and muted earnings sentiment. The benchmark BSE Sensex declined over 500 points to slip below the 83,050 mark, while the NSE Nifty fell more than 150 points to trade in the sub-25,550 zone. Weakness was not limited to frontline indices, as broader markets also remained under pressure, with both mid-cap and small-cap stocks trading in the red.

Market participants largely attributed the decline to profit booking at higher levels amid an uncertain global backdrop. Kranthi Bathini, Director – Equity Strategy at WealthMills Securities, said domestic benchmarks are currently moving in a 'sell-on-rise' and 'buy-on-dips' phase. He pointed out that concerns around global trade, including tariff-related developments, have kept investors cautious.

"Some profit booking at higher levels is happening in the market as of now. Continued selling from foreign portfolio investors has been creating pressure," Bathini said, adding that the ongoing earnings season has not provided strong triggers for a sustained rally. According to him, 25,500 remains a crucial support level for the Nifty in the near term.

Investor sentiment has also been influenced by the upcoming Union Budget 2026–27. Pranav Haridasan, MD and CEO of Axis Securities, said markets are closely watching for continuity and credibility in policy execution. He noted that over the past few years, a series of structural reforms -- ranging from GST rationalisation and direct tax simplification to digital and compliance-led initiatives -- have strengthened transparency and formalisation in the economy. In the current global environment marked by geopolitical uncertainty, slowing growth in major economies and volatile capital flows, he said a stable and predictable policy stance will be critical for maintaining investor confidence.

Adding to the cautious tone, VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said markets globally are likely to remain volatile in the near term due to major geopolitical and geoeconomic developments. He highlighted uncertainty around potential trade actions by the US and the possible response from European nations, noting that any escalation could impact global trade and growth prospects.

Vijayakumar said such developments are likely to have a negative influence on markets, advising investors to closely track unfolding events. For long-term investors, he suggested that periods of volatility may offer opportunities to selectively accumulate high-quality large-cap stocks.