Sensex hits one-month low, Nifty under 24,700 as heavyweights drag, volatility soars 7%

The India VIX index soared 7 percent to 12.1.

Dalal Street kicked off the week on a sour note, extending losses from the previous session in trade on Monday, July 28. A poor set of numbers from Kotak Mahindra Bank soured the sentiment, with a strong sell-off seen in other heavyweights, which dragged the benchmark indices deep into the red.

At close, the Sensex was down 572.07 points or 0.70 percent at 80,891.02, and the Nifty was down 156.10 points or 0.63 percent at 24,680.90. About 1,212 shares advanced, 2,760 shares declined, and 153 shares were unchanged. Further, the frontline indices hit their respective one month lows in trade today.

“Indian equities extended their losing streak on Monday as the markets grappled with disappointing earnings, foreign outflows, and uncertainty surrounding the delayed India-U.S. trade agreement," said Gaurav Garg, Lemonn Markets Desk.

"Domestic market sentiment has remained cautious, weighed down by a disappointing set of Q1 earnings, delays in the India-US trade agreement, and continued FII outflows. In contrast, global markets remain broadly positive, supported by US-EU trade developments that are perceived as less concerning than anticipated," added Vinod Nair, Head of Research, Geojit Investments.

On Monday, sectoral indices on the NSE largely ended in the red, reflecting broad-based weakness across the market. The Nifty Realty index was the biggest drag, slumping over 4 percent, followed by Nifty Media, which declined 2.6 percent. PSU Banks and Metal stocks also came under pressure, with the Nifty PSU Bank and Nifty Metal indices falling 1.2 percent.

On the other hand, defensives provided some cushion. The Nifty Pharma index rose 0.4 percent, and Nifty FMCG managed a modest gain of 0.2 percent, as investors rushed to the relative safety of these plays.

The broader markets saw deeper selling, with the Nifty Midcap 100 and Nifty Smallcap 100 tumbling over one percent each. The midcap gauge has slipped into the red for the third consecutive session, while smallcap index has extended losses for eight sessions in a row.

"The Nifty 50 index consolidation in recent months was well-capitalized by a run-up in smallcaps, which led the Nifty Smallcap index forward P/E to trade at a premium to both midcap and large-cap indices," noted InCred Equities.

Banking stocks were sharply lower following poor results from Kotak Mahindra Bank. Kotak Mahindra Bank reported a standalone net profit of Rs 3,282 crore for Q1 FY26, marking a 7 percent year-on-year decline from Rs 3,520 crore in the same period last year.

Further, information and technology stocks also dampened the sentiment following TCS' announcement to layoff 12,000 workers by trimming its workforce by two percent. However, brokerages were not a fan of the move.

International brokerage Jefferies noted that TCS plan to trim the workforce might lead to near-term execution slippages and higher long-term attrition. Going ahead, firms that are unable to gain market-share will have to resort to layoffs. This led to a rub-off effect in through the IT pack, and all large-cap IT players settled with losses.

The realty pack sank four percent following a disappointing earnings show from real estate giant Macrotech Developers (Lodha. The firm's shares sank as net profit declined 27 percent on a sequential basis.

On the technical front, for any meaningful upside to resume, the index needs to decisively close above the 25,150 mark. "A breakout above this level could open the door for higher targets around 25,500 and 25,700 in the upcoming sessions. Until then, the broader outlook remains sideways to bearish," Mandar Bhojane, Senior Technical & Derivative Analyst, Choice Broking said.

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