Mon Dec 08 11:20:00 UTC 2025: Here’s a summary of the text and a rewritten version as a news article:

Summary:

Indian stock markets experienced a significant slump on Monday, driven by a combination of factors including persistent Foreign Institutional Investor (FII) selling, rupee depreciation, rising global bond yields (particularly in Japan), and profit booking. The Sensex and Nifty both fell sharply, with broader markets and specific sectors like PSU banking and realty taking a hit. While short-term volatility is expected due to these risks, experts maintain a medium-term positive outlook based on India’s strong GDP growth and potential for future earnings growth. The market is currently balancing strong domestic fundamentals against increasing global uncertainties.

News Article:

Indian Stocks Plunge as Global Risks Weigh on Market Sentiment

Mumbai, India – Indian benchmark equity indices suffered a sharp decline on Monday, as a wave of selling pressure swept through the market. The S&P BSE Sensex closed down 722.60 points at 84,989.77, while the NSE Nifty50 dropped 250.85 points to finish at 25,936.45. The slump reflects growing concerns over global and domestic economic headwinds.

Broader market indices followed the downward trend, with mid-cap and small-cap stocks experiencing even steeper losses. Intraday volatility spiked, indicating increased investor anxiety. Sector-wise, PSU banking stocks were among the hardest hit, along with realty and chemical sectors.

Analysts attribute the market downturn to several factors, including persistent selling by Foreign Institutional Investors (FIIs). V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, pointed to the weakening rupee as a primary driver of FII outflows. “The sustained depreciation of the rupee has been forcing FIIs to continuously sell Indian equities, keeping pressure on benchmark indices,” he explained.

Furthermore, rising Japanese bond yields are adding to global risk. A surge in yields could trigger unwinding of the yen carry trade, potentially leading to further capital outflows from emerging markets like India.

“In brief, there is potential for high volatility in the near term,” Vijayakumar cautioned.

Despite the current market volatility, there remains optimism about India’s medium-term economic prospects. The nation’s GDP grew by a robust 8.2% in the second quarter, and the Reserve Bank of India has revised its FY26 GDP growth forecast upward to 7.3%. Vijayakumar noted that while low inflation has dampened nominal GDP growth and near-term corporate earnings, leading indicators suggest that around 15% earnings growth is achievable in FY27, which remains constructive for equities.

The Indian market currently finds itself navigating between strong domestic economic fundamentals and mounting global risk factors, particularly currency weakness, FII outflows, and volatile bond yields overseas. Investors should anticipate continued volatility in the near term as the market seeks a stable footing.

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