Nifty fell 207 points or 0.9% to close at 23,842. Sensex declined 702 points or 0.9% to end at 76,847. Both Nifty and Sensex had declined as much as 2% during the day, but traders covered some of their bearish bets ahead of the financial markets holiday on Tuesday.
Markets are closed on Tuesday on account of Ambedkar Jayanti.
“Today’s recovery from lows was likely largely driven by short covering and value buying at lower levels,” said Sriram Velayudhan, senior vice president, IIFL Capital Services.
The escalation in the US-Iran conflict, after negotiations fell through over the weekend and Donald Trump announced fresh blockades around the Strait of Hormuz, kept gains at bay in India as well as most other Asian markets.
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“The US blockade around Iranian waters has raised concerns over potential disruptions to oil supply, which has affected the investor mood,” said Gaurav Sharma, head of research at Globe Capital Market.
Brent Crude June Futures were up 7.3% to $102.2 a barrel on Monday evening. At home, the India Volatility Index or VIX — known as the street’s fear gauge — jumped 8.75% to 20.5 levels, indicating heightened caution in the truncated trading week.Nifty faces strong resistance around the 24,300 level, said Velayudhan, who expects gains to be capped.
The index’s hurdles could spark selling pressure at 23,850-23,900, according to Bhavya Shah, technical research analyst at Stoxbox.
“A sustained move above 24,200 could open the way for further gains toward 24,850, while a fall below 23,600 may lead to a sharper decline toward 23,100,” he said.
The Nifty Midcap 150 dropped 0.6%, and the Nifty Small-cap 250 fell 0.4% on Monday. Foreign portfolio investors net sold shares worth ₹1,983 crore. Domestic institutions were buyers worth ₹2,432 crore.