Indian equities extended Friday’s losses as sentiment remained extremely negative amid escalating global trade tensions. The Nifty 50 index experienced exceptional volatility on Monday, opening with a dramatic 5% gap down, the steepest opening decline since March 23, 2020. Intraday volatility reached an extraordinary 1,160 points, the highest since June 4 last year.

The Nifty saw a sharp recovery from the lows of the day to end at the day’s high in what was a forgettable session for the bulls. For the day, the index found support around the multiple support zones near 21,700.

Robust buying activity during the final trading hours ensured that the index closed near the day’s high. Despite trading well below it during the day, the index managed to close above the March 4 low of 21,964.

After recovering 500 points from the session’s low, the Nifty ended 743 points lower at 22,162.

The India VIX, or the volatility gauge for the index, saw its biggest-ever single-day jump, surging up to 70%.

The mid and small-cap segments mirrored the benchmark indices’ extreme intraday volatility. Following an early morning sell-off, these indices staged an impressive recovery. The Nifty Midcap 100 rebounded over 6% from its lows but still ended the day down 3.63%. Similarly, the Nifty Smallcap 100 bounced back by 7% but finished 3.88% lower than the previous close.

Metal, Auto, and IT stocks were among the most impacted, falling 3–7%. Barring Hindustan Unilever, all Nifty 50 stocks ended in the red, though a majority of them recovered from the day’s low and contributed to the market recovery.

Meanwhile, BSE-listed companies lost ₹13 lakh crore in market capitalisation on Monday.

Trent was the top Nifty loser, falling up to 20% following a weaker-than-expected Q4 business update. The stock has now declined for the third consecutive session and is trading near its June 2024 levels.

Investor confidence was severely shaken by several factors: growing global recession fears, heightened concerns about potential US tariff actions on Indian goods, and substantial selling pressure in frontline stocks ahead of the upcoming earnings season.

Despite these challenges, Indian equities have demonstrated relative strength compared to other markets, largely based on optimism that the world’s fifth-largest economy will endure only minor setbacks rather than severe damage during Trump’s trade conflicts, said Devarsh Vakil of HDFC Securities.

Speaking to CNBC-TV18, Rohit Srivastava of Indiacharts.com, said that 21,281, which is the low that the Nifty 50 index had made on June 4, the day of the Lok Sabha election results, is the level to watch, below which, there could be further downside for the index.

LKP Securities’ Rupak De said the trend remains weak in the short term. On the higher side, resistance is placed at 22,350 and 22,550. On the lower side, support is seen at 21,900, below which the decline is likely to resume.

Nagaraj Shetti of HDFC Securities said that Monday’s swing low of 21,743 could now be considered as an important support for the short term and one may expect buying to emerge from the lower levels. Immediate resistance is placed at 22,400.

“Technically, a decisive close below the 21,700 level on the Nifty could pave the way for further downside toward 21,300. Conversely, any recovery attempt is likely to face resistance in the 22,500–22,800 zone,” said Ajit Mishra of Religare Broking.