MUMBAI: Indian shares tumbled on Monday, with the midcap index recording its biggest slide in seven months, after an unexpectedly strong US jobs report signalled fewer Federal Reserve rate cuts amid persistent worries over slowing domestic earnings.
The benchmark Nifty 50 fell 1.47% to 23,085.95, while the BSE Sensex shed 1.36% to 76,330.01. Both benchmarks closed at their lowest in about seven months. The broader, more-domestically focussed small- and midcaps sank a steeper 4% each, which analysts said was due to relatively richer valuations that could be tested if corporate earnings disappointed.
“The slowdown in Indian economic growth is also leading to worries of a likely decline in corporate earnings growth,” said Yashovardhan Khemka, senior manager of research and analytics at Abans Holdings. The markets were also hit by unexpectedly strong US jobs data, which led investors to price in one US rate cut of 25 basis points in 2025. That lifted 10-year Treasury yields to 14-month highs and sent the dollar rallying, making emerging markets such as India less attractive for investment.
This has exacerbated foreign outflows, triggering a sharp decline in Indian markets, said Khemka.
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