Sensex, Nifty on track for steepest monthly fall since 2020

Indian shares fell on Monday and were on track to record their worst monthly performance since March 2020, as elevated oil prices and losses in financial stocks weighed on sentiment.

The Nifty 50 declined 1.20% to 22,551.35, while the BSE Sensex dropped 1.28% to 72,645.29 as of 10:25 am IST. Broader markets were under pressure, with both small-cap and mid-cap indices falling 2% each.

The decline followed a wider sell-off across Asia, where stocks dropped 1.6%. Brent crude remained above $115 a barrel and was headed for a record monthly rise as the Middle East war intensified. Yemen’s Iran-aligned Houthis launched attacks on Israel, raising concerns about further disruptions to shipping routes.

Both the Nifty 50 and Sensex have fallen about 10.5% each in March, putting them on course for their worst month since the COVID-19-led rout in March 2020. Market sentiment has been impacted by elevated crude prices and record foreign outflows amounting to $12.3 billion during the month.

For financial year 2026, which ends on Monday, the indices are down 4% and 6%, respectively. They are set for their weakest annual performance since FY2020, weighed by India-Pakistan tensions, US trade uncertainty in the first half, and the Iran war in the second half, alongside continued foreign outflows.

“Assuming disruptions through Hormuz continue in April, we expect a more than 10% earnings hit for oil marketing companies, airlines, cement, tiles, paints and adhesives,” said Mahesh Nandurkar, equity analyst at Jefferies.

FY2027 GDP could ease by 50 basis points, while India’s corporate earnings may be cut by 2%-2.5% due the conflict, Nandurkar said.

Financial stocks led the losses on Monday, with banks, private lenders and state-owned banks falling between 2% and 2.5%. The decline followed the Reserve Bank of India tightening position limits on onshore exposure, a move that bankers said could lead to disorderly unwinding of positions and potential losses.

Among individual stocks, Hindalco and Nalco rose 3.5% and 4.7%, respectively, tracking a rise in aluminium prices after the Middle East’s two largest producers sustained damage in Iranian attacks over the weekend.

(With inputs from Reuters)