The Indian stock market may see some downtrend on Monday after GIFT Nifty tumbled more than 1.5% overnight as strong US jobs data triggered a sharp stock market crash in the US, pushing bond yields higher.

GIFT Nifty dropped 356 points, or 1.52%, to 23,091, signalling a bearish beginning for Dalal Street on Monday to extend sharp losses from last week. Sensex had closed 117 points lower at 74,243, and Nifty 50 fell 50 points to end the session at 23,367 on Friday.

Wall Street sharply crashed on Friday, with the tech-heavy Nasdaq plunging more than 4% to record its biggest single-day fall since April 2025, after a better-than-expected US jobs report raised worries about the Federal Reserve’s higher interest rates.

The Nasdaq Composite index sank around 4.2%, while the Dow Jones Industrial Average fell 1.4%. The S&P 500 dropped nearly 3%. As a result of the rising inflation worries, US Treasury yields surged. The yield on the 2-year note, which typically moves in step with Fed rate expectations, jumped to a 15-month high. Higher rates by the central bank make bonds more attractive and future corporate profits worth less in today's dollars.

What to expect for Dalal Street

The central bank raised its FY27 inflation forecast to 5.1% and lowered its FY27 GDP growth forecast to 6.6%, reinforcing concerns around energy prices, geopolitical tensions in West Asia and weather-related uncertainties, the analyst highlighted. “If inflationary pressures remain elevated and external risks persist, the likelihood of a future monetary tightening cycle could increase, which kept investors cautious. RBI kept the repo rate unchanged at 5.25% for a third consecutive meeting. It has also announced measures to attract foreign capital and support the rupee, including easing investment norms for NRIs and OCIs, incentivising FCNR(B) deposits and facilitating foreign currency inflows. Moreover, the Government exempted FPIs from taxes on interest income and capital gains from investments in government securities, a move aimed at boosting foreign inflows and enhancing the attractiveness of Indian debt markets. Looking ahead, investors will closely monitor energy prices, the ongoing West Asia conflict, progress in monsoon, FIIs fund flows and the impact of RBI’s measures for further direction,” he added.

Nifty 50 has been oscillating within a defined range as it absorbs the RBI policy announcement, said Rupak De, Senior Technical Analyst at LKP Securities. He highlighted that the sentiment continues to remain weak, with the index sustaining below its critical moving averages. The RSI also remains weak, indicating a lack of positive momentum.

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“In the short term, the index is likely to consolidate within the 23,300–23,500 range. A decisive breakout above 23,500 could trigger a rally towards 25,700 and higher, while a breach below the 23,300 support level may lead to a sharp correction,” according to the analyst.