The Indian stock market slipped into the red on Monday, with Sensex and Nifty extending a four-week losing streak, even as economic and corporate earnings trends remain supportive.

Sensex dropped around 383 points to close at 76,133 while Nifty 50 lost around 119 points to end the session at 23,779 on Monday. This comes as a fresh escalation in the US-Iran conflict pushed oil prices higher, along with other factors that weighed on investor sentiment.

Here's how analysts read the market pulse

Domestic main benchmark indices and large-cap stocks remain influenced by developments in the Strait of Hormuz, while the broader market shows a clear divergence, with small-caps and select mid-caps rally backed by stronger earnings, said Vinod Nair, Head of Research at Geojit Investments. He added that value buying has gained traction following the late-2025 and early-2026 sell-off, making valuations attractive as corporate earnings shift from downgrades to upgrades.

“However, the broader market rally is becoming stretched, leaving Dalal Street increasingly exposed to supply-chain disruptions and the risk of weaker high-frequency macroeconomic indicators. In Q1, higher input costs had little impact on corporate earnings due to stronger consumer demand and tax reduction gains, accommodating product and service price hikes. Going forward, there is a growing risk that these supportive factors may fade potentially, weakening earnings expectations and increasing vulnerability to the broad market rally,” he further said.

US markets were closed on Monday on the occasion of Labor Day observed across the country.

European equities closed mixed on Monday as rising crude oil prices and central bank rate expectations weighed on market sentiment. The STOXX 600 dipped 0.1% to 649.17, pressured by energy-driven inflation fears ahead of Thursday’s ECB decision.

UK's FTSE 100 gained 0.2% to close at 14,666, rebounding from earlier session lows. France's CAC 40 outperformed broader European bourses, advancing 0.33%. Germany's DAX slipped 0.1% to around 26,046, burdened by regional election uncertainty in Saxony-Anhalt and rising German Bund yields.

Nifty 50 on the daily chart formed a bearish candle with a lower high and a lower low signaling continuation of the corrective decline as the index closed below the 23,800 levels, said Pabitro Mukherjee, Deputy Vice President-Research at Bajaj Broking. He noted that the immediate bias in the index remains down and sustaining below 24,025 levels will open downside towards the key support area of 23,600-23,500 levels being the confluence of the previous major gap area and the low of July 2026.

“On the higher side, key resistance is placed at 24,150 levels being the confluence of the last week high and 50 days EMA, only a move above the same will signal a pause in the downtrend. Key observation in the daily chart is that the daily stochastic and daily 14 periods RSI has approached oversold territory. Hence, index holding above the support area of 23,600 –23,500, will lead to a pullback towards the 50-day EMA placed around 24,150,” according to the analyst.

Most active stocks in terms of turnover

IFCI (Rs 2,158 crore), Syrma SGS Technologies (Rs 2,082 crore), BSE (Rs 1,362 crore), RIL (Rs 1,336 crore), ICICI Bank (Rs 1,146 crore), Bharti Airtel (Rs 1,100 crore), and Vodafone Idea (Rs 1,077 crore) were among the most active stocks on NSE in value terms. Higher activity in a counter in value terms can help identify the counters with the highest trading turnovers in the day.

Most active stocks in volume terms

Vodafone Idea (Traded shares: 69.52 crore), IFCI (Traded shares: 20.78 crore), JP Power (Traded shares: 9.14 crore), Zee Entertainment Enterprises (Traded shares: 4.26 crore), Yes Bank (Traded shares: 3.33 crore), SAIL (Traded shares: 3.25 crore) and Suzlon Energy (Traded shares: 2.89 crore) were among the most actively traded stocks in volume terms on NSE.

Syrma SGS Technologies, CarTrade Tech, Wockhardt, HFCL, Zydus Wellness, Supreme Petro and Vodafone Idea were among the stocks that witnessed strong buying interest from market participants.

Among the ones which hit their 52-week highs on NSE included Syrma SGS Technologies, Vodafone Idea, Piramal Pharma, Solar Industries, Redington, Welspun India and Gland Pharma.

Stocks which witnessed significant selling pressure were Zee Entertainment Enterprises, PVR Inox, ICICI Prudential Life Insurance Company, SAIL, Manappuram Finance, Dipak Nitrite and Sun TV.

Among the ones which hit their 52-week lows on NSE included Sun TV, Godrej Consumer, KEC International, Dabur India, Swan Energy, IndiaMART and Britannia Industries. .

Out of the 3,698 stocks that traded on the NSE on September 7, Monday, 1,509 stocks witnessed advances, 2,084 saw declines while 105 stocks remained unchanged.

(Disclosure: "This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The EconomicTimes Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment.")