SENSEX falls over 450 pts, NIFTY50 ends at 25,517: Why did the market fall today?

The Indian equities had a stellar run last week, with the headline indices scaling eight-month highs on easing geopolitical tensions and the Trump administration's soft stance on the reciprocal tariffs.

Both SENSEX and NIFTY50 gained 2% on a weekly basis. Hence, market participants on Monday moved to book some profit in the outperforming stocks.

The S&P BSE SENSEX slipped as much as 576.77 points, or 0.68%. Similarly, the NIFTY50 index of the NSE fell 164.5 points, or 0.64%.

Top contributors to the market's fall

Other losers

Apart from these, names such as L&T, Infosys, Sun Pharma, and HUL were all trading in the red, thus adding pressure to the headline indices.

Recently, market expert Christopher Wood, in the latest edition of the GREED & Fear report published by Jefferies, said valuations have once again emerged as a key concern for Indian equities, especially in the mid-cap segment.

According to Wood, the recent rally in the Indian market has stretched valuations across the board, particularly in mid-cap stocks.

“The Nifty Index now trades at 22.2 times 12-month forward earnings after a 14.1% rise from its April 7 low. Meanwhile, the Nifty Mid-Cap 100 Index has surged 23.7% over the same period and now trades at an elevated 27.1x forward earnings,” Wood wrote in the report.

As valuations rose, corporates started taking advantage by offloading shares via block deals and other routes. The report notes that Indian companies raised $7.2 billion via equity placements in May and a further $6 billion so far around June 20.