Benchmark equity indices closed lower on Monday, ending their recent upward run as investors booked profits amid concerns about a weak monsoon, muted expectations for first-quarter corporate earnings and uncertainty surrounding the durability of the US-Iran ceasefire arrangement.
The BSE Sensex dropped 372.10 points, or 0.48 per cent, to finish at 76,728.37, while the NSE Nifty50 declined 109.75 points, or 0.46 per cent, to close at 23,946.25.
The market entered the session after recording its longest weekly winning streak of 2026. However, the strong gains accumulated over recent weeks encouraged investors to lock in profits.
Profit Booking Weighs on Markets
Investor sentiment remained guarded despite easing geopolitical tensions in West Asia and crude oil prices staying near multi-month lows.
Market experts noted that much of the positive sentiment generated by lower oil prices, reduced foreign investor selling and policy measures aimed at supporting the rupee had already been reflected in stock valuations, prompting a temporary pause in the rally.
Although the United States and Iran agreed to suspend hostilities and resume discussions regarding the Strait of Hormuz dispute, investors remained cautious due to concerns about the long-term stability of the interim agreement.
Pharma and Healthcare Stocks Outperform
Selling pressure was visible across most sectors.
Automobile stocks were among the worst performers, with the Nifty Auto index falling 2.08 per cent. The Nifty MidSmall IT & Telecom index declined 2.20 per cent, while the Nifty IT index lost 1.07 per cent. Media, oil and gas, PSU banking and private banking stocks also ended the session lower.
Defensive sectors provided some support to the market. The Nifty Pharma index advanced 1.03 per cent, while the Nifty Healthcare index gained 0.94 per cent as investors shifted towards sectors viewed as having more stable earnings prospects.
Among Sensex constituents, Kotak Mahindra Bank fell 3.24 per cent, Mahindra & Mahindra declined 2.79 per cent, Maruti Suzuki dropped 2.12 per cent and IndiGo lost 2.05 per cent. On the positive side, Eternal rose 1.39 per cent, while Trent and Bharat Electronics each gained 1.34 per cent.
Broader Markets Also Decline
The broader market also finished in negative territory. The Nifty Smallcap 100 index fell 0.62 per cent, while the Nifty Midcap 100 index declined 0.37 per cent.
Vinod Nair, Head of Research at Geojit Investments Limited, said investors continued to book profits near key psychological levels while remaining cautious about the sustainability of the temporary US-Iran peace arrangement.
According to Nair, the market currently lacks a strong short-term catalyst, with expectations for the June-quarter earnings season remaining subdued due to supply-side challenges, continuing inflationary pressures and concerns over a weak monsoon, all of which could affect corporate profitability.
He noted that defensive sectors such as pharmaceuticals and healthcare outperformed because of their resilient demand patterns and stronger earnings visibility.
Nair also said investors are closely watching upcoming US non-farm payroll data, which could influence the future policy decisions of the US Federal Reserve. He added that a slowdown in foreign institutional investor outflows and a normalisation of the recent artificial intelligence-driven rally in global markets could provide fresh support to Indian equities in the coming months.
