Sensex crashes 1,124 points: What triggered Monday’s massive market selloff?

The NSE Nifty50 also declined 360.25 points to end the session at 22,780.25.

The market witnessed a broad-based sell-off on Monday, following its longest weekly losing streak since 2020 last Friday.

“Brent crude at $106 and the US 10-year yield at 5.2 per cent are strong headwinds that are weighing on markets. FPIs, after turning buyers in July and August, have again turned sellers in September. This scenario will keep the market under pressure in the near term,” Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments, told Business Standard.

Among the key factors weighing on investor sentiment was the possible escalation of tensions in West Asia after US President Donald Trump rejected an Iranian proposal to reopen the Strait of Hormuz and end the fighting.

Iran, meanwhile, has indicated that diplomacy remains the only way to end the conflict.

The developments had a ripple effect across global equity, oil and bond markets.

With no resolution in sight to the ongoing Middle East crisis, Brent crude futures rose 2.2 per cent to $106.6 a barrel, while US WTI crude gained 1.45 per cent to $93.76 a barrel.

Quoting NSDL data, Business Standard reported that foreign portfolio investors (FPIs), after remaining net buyers in July and August, turned sellers in September and offloaded stocks worth ₹17,131 crore. This took their year-to-date selling to ₹2.41 trillion.

“From the market perspective, an important trend is that even though FPIs are sellers in large-caps, they continue to buy mid-and small-caps despite their elevated valuations. The broader market is where the momentum is. This is likely to be a short-term phase,” Vijayakumar told the newspaper.