Sensex Crashes 1,100 Points, Nifty Slips 1.5%; Worst May In Years

Indian benchmark indices suffered a sharp selloff on Friday, erasing early gains and ending near the day's lows as concerns over a weaker monsoon forecast, persistent foreign fund outflows and technical weakness triggered broad-based selling across sectors.

The BSE Sensex plunged 1,092.06 points or 1.44% to close at 74,775.74, while the NSE Nifty50 dropped 359.40 points or 1.5% to settle at 23,547.75. The selloff was particularly severe considering both indices had started the day in positive territory. During the session, the Sensex swung nearly 1,450 points from its intraday high, while the Nifty briefly crossed 24,000 before ending close to the 23,550 mark.

The sharp decline also capped a weak month for domestic equities. The Sensex fell 2.8% in May, marking its worst May performance in six years, while the Nifty declined 1.9%, its weakest May showing in four years.

Monsoon Forecast Triggers Concerns

Investor sentiment deteriorated after the India Meteorological Department downgraded its southwest monsoon forecast from 92% to 90% of the long-period average. The revision raised concerns over rural demand, agricultural output and food inflation at a time when markets are already grappling with macroeconomic uncertainties.

Vinod Nair, Head of Research at Geojit Investments, said the revised rainfall outlook became the key trigger behind the selloff.

"The market witnessed broad-based selling pressure following the IMD's monsoon forecast cut to 90% of the long-period average, raising concerns among investors. The prospect of deficient rainfall, coupled with the increasing likelihood of an El Niño weather pattern, has heightened fears of elevated food inflation in the coming months," he said.

While crude oil prices continued to decline and global markets remained supported by expectations of a possible US-Iran diplomatic breakthrough, those positives were overshadowed by domestic concerns.

Technical Breakdown Accelerates Selling

Market experts said technical factors amplified the decline after benchmark indices failed to sustain above key resistance levels.

Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, said the Nifty traded in a descending triangle-like pattern before witnessing a breakdown during the second half of the session.

"On the daily chart, Nifty once again failed to close above its 50-day EMA and formed a sizeable bearish candle with a noticeable upper wick, highlighting the index's inability to sustain at higher levels," Shah said.

He added that this was the third straight session in which the index formed a pronounced upper wick, signalling persistent profit booking at higher levels.

Rupak De, Senior Technical Analyst at LKP Securities, said the benchmark has now broken below a rising trendline on the daily chart, indicating a return of bearish sentiment.

According to De, the correction could extend towards the 23,250 level in the near term, while resistance remains around 23,700.

Oil & Gas Stocks Lead Declines

Sectorally, Nifty Oil & Gas and Nifty CPSE were among the worst performers, losing more than 2% each. ONGC emerged as the biggest loser on the Nifty50, tumbling nearly 8.5%, while several energy-related counters came under pressure despite lower crude prices.

Nifty FMCG fell more than 1.5% and ended lower for the third consecutive week. Consumer-focused stocks remained under pressure due to concerns that weaker rainfall could affect rural consumption trends.

Among individual stocks, ONGC and Max Healthcare were among the top losers, while Tech Mahindra and HCL Technologies managed to end in positive territory. Notably, Nifty IT was the only major sectoral index to close in the green.

Broader Markets Show Resilience

Despite the sharp fall in benchmark indices, broader markets remained relatively resilient. The Nifty Midcap 150 gained 0.3% and closed higher for the second consecutive week, while the Nifty Smallcap 250 rose more than 1%.

Market participants continued to favour select midcap and smallcap counters, reflecting confidence in company-specific growth stories despite broader market weakness.

However, overall market breadth remained negative. Out of the Nifty 500 universe, 364 stocks ended in the red, while India VIX rose 6% to 15.91, indicating increasing nervousness among traders.

Foreign institutional investors remained sellers, offloading ₹1,040 crore worth of equities during the previous session. Their cumulative outflows in 2026 have already crossed $24 billion, surpassing the record annual outflows witnessed in 2025.

Investors will now focus on the upcoming RBI monetary policy decision and GDP data, which are expected to provide further clarity on inflation trends and the broader economic outlook.