Indian Stock Market Struggles Ahead of Monthly Expiry: Nifty Slips Below 26,000

The Indian stock market experienced a significant downturn on Monday, with the Nifty 50 and Sensex both closing in the red. The market was dragged lower by broad-based selling, particularly in the final hour of trading, just ahead of the monthly derivatives expiry. Nearly 40 of the Nifty 50 stocks ended the day in the red, reflecting the overall weak sentiment.

The Nifty 50 closed 0.42% lower at 25,960, slipping below the 26,000 mark, while the Sensex dropped 441 points to 84,791. Earlier in the session, the market was supported by gains in IT and banking stocks, but the momentum faded as the day progressed. The NSE advance-decline ratio stood at 1:3, indicating a strong bias towards declines.

Despite the overall weakness, the auto sector outperformed, with two-wheeler makers leading the gains. Eicher Motors and Bajaj Auto were among the top Nifty gainers, alongside Tech Mahindra, Wipro, and Shriram Finance. These companies managed to buck the trend and provide some positive momentum to the market.

However, the defence sector faced significant pressure, with stocks falling between 2% and 4%. This decline was triggered by a crash involving HAL’s Tejas aircraft, which led to sector-wide selling. CG Power also saw a sharp drop of 4% after its Chittaranjan Locomotive Works order was cancelled, adding to the market's woes.

Real estate shares also took a hit, declining sharply on expectations that India’s new labour codes could increase developers’ costs by 10–15%. This added to the overall bearish sentiment and contributed to the market's drop.

Among midcap stocks, RVNL and NBCC managed to rise 4–5%, bucking the broader trend. MCX gained around 2% after the exchange’s management offered an upbeat business outlook, which provided some relief to investors. Max Financial also advanced following reports that the government may clear its insurance and non-insurance merger proposal, adding a positive note to the market.

As the market looks ahead, investors will be closely watching for any further developments that could impact the market sentiment, especially in the lead-up to the monthly expiry. The upcoming earnings season and macroeconomic indicators will also play a crucial role in shaping the market's direction in the coming days.

Stay tuned for all the latest updates and analysis on the Indian stock market.