Indian Stock Market Volatility: Nifty, Sensex, and Key Stocks Decline on Monday

---

On Monday, March 3, 2025, the Indian stock market faced significant volatility as major indices like the Nifty 50 and Sensex erased early gains to close in the red.

The day was marked by heavy selling pressure across sectors, driven by global uncertainties, foreign investor outflows, and weak domestic economic indicators. Here’s an in-depth analysis of the market’s performance and the factors influencing it.

Nifty 50 Performance

The Nifty 50 opened positively at 22,234.80, gaining over 110 points in early trade. However, it soon reversed its trajectory due to broad-based selling pressure and dropped by 112 points to settle near 22,008 by mid-morning.

This marked a continuation of the bearish trend seen last week when the index fell sharply by 1.86%. The decline was fueled by foreign institutional investor (FII) outflows and concerns over global trade tensions.

Sensex Performance

The Sensex mirrored the Nifty’s performance, opening higher at 73,585.72 with a gain of over 350 points. However, it later lost momentum, shedding at least 370 points to trade around 72,825 by mid-morning.

The index struggled to maintain gains as heavyweight stocks like Reliance Industries and HDFC Bank faced sharp declines.

HDFC Bank Ltd. and Reliance Industries

HDFC Bank Ltd., one of India’s largest private sector banks, saw heavy selling pressure on Monday. Its stock price dropped significantly due to broader market weakness and FII outflows.

Reliance Industries also faced a steep decline of around 3%, further dragging down the indices. Together, these two heavyweights accounted for a substantial portion of the losses in both the Sensex and Nifty.

Other Key Losers

Several other prominent stocks contributed to the market’s decline:

• IndusInd Bank

• Axis Bank

• Bajaj Finserv

• Tata Steel

• Adani Ports

• Tata Motors

• Zomato

• Bajaj Finance

• Hindustan Unilever

These stocks fell between 1.5% and 3%, reflecting sector-specific challenges and weak investor sentiment.

Top Gainers

Despite the overall downturn, a few stocks managed to post gains:

• UltraTech Cement

• Mahindra & Mahindra

• Tech Mahindra

• Larsen & Toubro

• HCL Tech

• Infosys

• Bharti Airtel

These stocks gained between 0.5% and 2%, driven by strong fundamentals and sector-specific resilience.

Midcap and Smallcap Indices

The broader market also witnessed selling pressure:

• The Nifty Midcap 150 Index dropped by over 2%, reflecting risk aversion among investors.

• The Nifty Smallcap Index followed suit with similar declines.

Factors Driving Market Volatility

1. Global Trade Tensions: Escalating trade tensions involving new tariffs on China, Canada, and Mexico created uncertainty in global markets.

2. Foreign Investor Outflows: FIIs pulled out ₹34,574 crore from Indian equities in February alone, bringing total outflows for 2025 to ₹1.12 lakh crore so far. This trend has been attributed to high valuations in Indian markets and better opportunities in other regions like China and the US.

3. Domestic Economic Data: India’s GDP growth slowed to 6.2% in Q3 FY25 from 7.6% in the previous quarter, raising concerns about economic recovery.

4. Weak Earnings Season: A lackluster earnings season added to investor pessimism, particularly for sectors like banking and manufacturing.

5. Global Geopolitical Risks: Ongoing geopolitical tensions between the US and Ukraine further dampened sentiment.

Outlook for Indian Markets

Market experts believe that while short-term volatility is likely to persist due to global uncertainties and FII outflows, long-term investors could find opportunities in high-quality stocks like HDFC Bank that are fundamentally strong.

Technical charts suggest that Nifty could find support around the 21,800–22,000 levels, while Sensex may stabilize near the 73,000 mark.

In conclusion, Monday’s trading session highlighted the fragility of investor sentiment amid global headwinds and domestic challenges.

Heavyweight stocks like HDFC Bank and Reliance Industries bore the brunt of selling pressure, dragging down key indices despite some resilience shown by select gainers like UltraTech Cement and Infosys.

Investors are advised to tread cautiously while keeping an eye on macroeconomic developments and global trends.