The last time this happened was in 1996.
Indian equity benchmarks extended their losing streak for the fifth consecutive session on Monday, February 24, 2025, closing at their lowest levels in eight months.
The decline was driven by growing concerns about the US economy, weak corporate earnings, and persistent selling by foreign portfolio investors (FPIs).
The Sensex ended the day at 74,454, down 857 points or 1.1 per cent, while the Nifty closed at 22,553, dropping 243 points or 1.06 per cent.
Both indices have now declined in 13 of the last 14 sessions, with Monday's close marking their lowest levels since June 6.
From their all-time highs, the Sensex has fallen by 13.2 per cent, and the Nifty by 14 per cent.
February is set to mark the Nifty's fifth straight monthly fall, an occurrence last seen in 1996.
The broader market also saw significant declines. The Nifty MidCap 100 and Nifty SmallCap 100 indices fell by 0.9 per cent and 1.02 per cent, respectively, on Monday. From their peaks, these indices have dropped by 17.8 per cent and 21.3 per cent.
The total market capitalisation of BSE-listed firms fell by ₹4 trillion, settling at ₹398 trillion, a decline of close to ₹80 trillion from its all-time high.
On Monday, FPIs were net sellers of ₹6,287 crore, bringing their total net selling in 2025 to ₹1.05 trillion.
IT stocks were among the hardest hit, with the Nifty IT index falling 2.7 per cent, as the US remains a key market for Indian IT firms.
U R Bhat, co-founder of Alphaniti Fintech, said shifts in US trade policy were likely to be inflationary.
"If inflation rises, the possibility of rate cuts diminishes, and we could even see rate hikes. This would be detrimental to emerging markets like India, as higher return expectations from risk assets could lead to capital outflows," said Bhat.
"Until there is stability in US global trade relations, markets are likely to remain turbulent. The current level of uncertainty is unprecedented," he added.
US consumers' long-term inflation expectations have risen to their highest level in three decades, fueled by concerns that former President Donald Trump's policies could drive prices higher.
According to the University of Michigan, US consumers now expect prices to rise at an annual rate of 3.5 per cent over the next five to ten years, the highest reading since 1995.
These inflationary pressures, coupled with uncertainties around US trade policy, are likely to influence the US Federal Reserve's approach to interest rates.
Federal Reserve Chair Jerome Powell has already signaled that further rate cuts are not imminent.
Additionally, US consumer sentiment fell more than expected in February, dropping to 64.7 from 71.7 in January -- the lowest level since November 2023.
Indian equity markets have been under pressure since October 2024, weighed down by slowing corporate earnings growth, stretched valuations, and persistent FPI selling.
The situation has been exacerbated by the outperformance of Chinese markets this year, where attractive valuations are drawing investors away from India.
Market breadth remained weak, with 2,879 stocks declining and only 1,157 advancing. Major contributors to the Sensex's decline included Infosys, which fell 2.8 per cent, and HDFC Bank, which dropped 0.9 per cent.
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Feature Presentation: Rajesh Alva/Rediff.com
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