weak monsoon – A sharp selloff on Friday sent the Sensex down 1,092.26 points to 74,775.74 and the Nifty50 down 359 points to 23,547.75. Investors pointed to IMD’s forecast of below-normal monsoon rainfall, continued foreign institutional outflows, and lingering uncertainty
By the final hours of trade on Friday, the market mood had turned from caution to something harsher. The Sensex slid 1,092.26 points to close at 74,775.74, while the Nifty50 fell 359 points to settle at 23,547.75. Behind the numbers was a feeling many investors share on days like this: it wasn’t one bad headline—it was several. hitting at once.
The damage spread fast. Nearly Rs 5 lakh crore in investor wealth was wiped out as volatility surged, with India VIX rising around 9 per cent to 16.35.
Power Grid led the declines on the Sensex, falling more than 4 per cent. IndiGo dropped over 3 per cent ahead of its quarterly results. Bajaj Finance, UltraTech Cement, Tata Steel, Sun Pharma and NTPC each fell more than 2 per cent. Still, not all counters surrendered—Tech Mahindra and HCLTech gained nearly 2 per cent even as the broader trend pulled lower.
The market’s first blow came from weather—and what it could cost.
IMD’s monsoon forecast set off inflation worries
Friday’s selloff was triggered by the India Meteorological Department’s forecast of below-normal rainfall during the June-September monsoon season. The forecast said monsoon rainfall from June to September will be “below normal” and is likely to be 90% of the long-period average.
M Ravichandran, secretary at the Ministry of Earth Sciences, described the projection as likely to be at 90% of the long-period average (LPA), which the market understands as the long-term normal rainfall for a region, derived by averaging rainfall data over several decades—typically 30–50 years.
Traders and investors reacted sharply to a projection described as the weakest monsoon outlook in 11 years. The concern wasn’t abstract. A deficient monsoon raises fears of food inflation and weaker rural demand, especially as El Niño conditions continue to influence weather patterns.
Vinod Nair. Head of Research at Geojit Investments. said: “The market witnessed broad-based selling pressure following the IMD’s monsoon forecasts to 90% of the long-period average (LPA). raising concerns among investors.” He added that “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.”.
Then came the second pressure point: geopolitics that still won’t settle into certainty.
US-Iran peace deal uncertainty kept investors cautious
Even as traders digested the weather forecast, they also had to price in uncertainty around efforts to convert the current US-Iran ceasefire into a broader peace agreement.
Reports suggested Washington and Tehran have agreed to extend the ceasefire for 60 days. But that extension still awaited approval from US President Donald Trump.
US Vice President JD Vance said negotiators were “very close” to a peace deal but were still “going back and forth on a couple of language points”, including the “question of enrichment”.
Hariprasad K. Research Analyst and Founder. Livelong Wealth. said as quoted PTI that “Geopolitical uncertainty also continued to weigh on investor confidence.” He pointed out that while initial optimism emerged around a possible extension of the US-Iran ceasefire arrangement. the absence of formal confirmation from Washington kept global institutional investors cautious ahead of the weekend. limiting aggressive risk-taking across equities.
The result was a market that couldn’t fully relax—even when earnings provided some grounding.
Foreign investors kept selling, extending the hit
Foreign flows added to the strain. Persistent selling by foreign institutional investors weighed on sentiment throughout the day.
Provisional NSE data showed foreign investors sold Indian equities worth Rs 1,043 crore on Wednesday. FIIs have remained net sellers in 13 of the 18 trading sessions so far in May.
That continued outflow kept pressure on domestic markets even as corporate earnings held up relatively well.
The fall wasn’t confined to the big names; it moved through the market’s building blocks.
Sectors slid, while a few resisted
The weakness extended beyond the frontline indices. The Nifty Smallcap 100 and Nifty Midcap 100 indices fell around 1 per cent each.
Across sectors, Nifty Oil & Gas declined around 2.5 per cent, and Nifty Metal dropped more than 2 per cent. Nifty IT was the only major sectoral index to end marginally higher.
Oil prices eased, and the rupee strengthened—small signals amid the selloff
As equities fell sharply, some global and currency signals moved in a direction investors typically like. Brent crude futures fell nearly 2 per cent to below $92 per barrel, while WTI crude futures declined around 2 per cent to trade near $87 per barrel.
The rupee also strengthened. It rose 53 paise to close at 95.05 against the US dollar from 95.69 in the previous session. Ahead of Friday’s opening, the Reserve Bank of India was said to likely intervene in the foreign exchange market to support the domestic currency.
What happens next: analysts point to earnings, but the weather and flows linger
Even with the sharp correction, analysts highlighted earnings trends and softer oil as reasons the panic may not be permanent.
VK Vijayakumar of Geojit Investments said: “A positive trend from the market perspective is that Q4 results have been better-than-expected. The double-digit earnings growth in financials. automobiles and metals is impressive.” He added that trends indicate FY27 will be good for defence. capital goods. renewable energy. financials and pharmaceuticals. and that growth sectors like digital platform companies are getting accumulated on declines.
The market ended the day with the clearest message: when monsoon uncertainty meets foreign selling and geopolitics that won’t lock in, even encouraging company numbers struggle to stop the slide—at least not in the final hours of trade.
Sensex Nifty50 monsoon forecast IMD foreign investors FIIs US-Iran ceasefire JD Vance India VIX Power Grid IndiGo rupee