Indian equity benchmarks started the week on a weak note on Monday, dragged down by banking, financial, automobile, consumer durable and energy stocks amid rising geopolitical concerns and persistent foreign fund outflows. The broader market also remained under pressure, with midcap and smallcap indices falling around 1 per cent each.

The 30-share BSE Sensex pack slumped 1,312.91 points or 1.70 per cent to close at 76,015.28, while the NSE Nifty index tanked 360.30 points or 1.49 per cent to settle at 23,815.85.

Going ahead, market participants said investor sentiment may remain cautious amid elevated crude oil prices, rupee weakness, global uncertainties and sustained foreign institutional investor (FII) selling.

Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd (MOFSL), stated, "Indian equities are expected to remain cautious in the near term amid escalating geopolitical tensions, with stock- and sector-specific action likely to continue alongside the final leg of the Q4FY26 earnings season. Elevated crude oil prices, rupee weakness, and sustained FII selling are expected to keep overall market sentiment subdued."

He added, "Brent crude emerged as the key market trigger, intensifying concerns around imported inflation and India's external balances. The rupee also came under significant pressure, hitting a new all-time low, plunging to 95.32 against the US dollar in early trade amid heightened risk aversion and increased hedging demand. Meanwhile, global focus is shifting towards the upcoming meeting between US President Trump and Chinese President Xi Jinping, scheduled in Beijing between May 13 and 15. Discussions are expected to span trade, investment cooperation, Iran, Taiwan, nuclear arms, artificial intelligence, and rare earth supply chains."

Aakash Shah, Research Analyst at Choice Equity Broking, noted, "Overall, the market structure suggests a cautious short-term outlook with stock-specific action likely to dominate until the index regains strength above key resistance levels."

Ajit Mishra – SVP (Research) at Religare Broking, said,  "Markets witnessed a sharp risk-off session on Monday, with benchmark indices ending in the red amid sustained selling pressure across sectors. The Nifty opened gap-down and remained range-bound throughout the session. Selling pressure was broad-based, with most sectoral indices closing lower.

The sharp correction was primarily triggered by a spike in crude oil prices following renewed geopolitical tensions surrounding the US-Iran situation after the US President expressed dissatisfaction over Iran’s peace proposal. On the domestic front, sentiment was further dented by the Prime Minister’s remarks on fuel conservation and import moderation, which raised concerns over growth moderation and external sector stress. Persistent FII selling, rising global bond yields, and weakness in the rupee added to the cautious undertone. Meanwhile, stock-specific earnings reactions continued to drive selective volatility across sectors."

Mishra also said, "Technically, Nifty has once again approached the lower band of its consolidation range near the 23,800 zone. A decisive breakdown below this level could trigger the next leg of decline toward 23,500, followed by the major support zone around 23,150. On the upside, immediate resistance is placed near 24,100, while a stronger hurdle is seen around 24,400."

He further stated, "Given the prevailing volatility, traders should avoid aggressive index positions and wait for clearer directional cues. Sectorally, we continue to prefer pharma and healthcare counters, while recommending investors utilise dips to accumulate quality names in the energy and metal space. Conversely, banking, IT, and crude-sensitive sectors such as aviation and paints may continue to underperform and could present selective short-selling opportunities."