Sensex, Nifty in tailspin — Here are 5 factors causing the Monday mayhem

Cipla was the only stock in green on the Nifty. All others sat in red on the two benchmark indices.

Amid sectoral indices, Nifty PSBs cracked 4 percent while Nifty Realty, Banks, Financials were down 3 percent each.

In the broader markets, BSE MidCap and SmallCap indices tanked 2.3 and 2.4 percent, respectively.

Abhilash Narayan, Senior Investment Strategist-Group Wealth Management, Standard Chartered Bank, believes that the next 3-6 months could be volatile for Indian equities.

“We think that it could be a bit more volatile for Indian equities in the next three to six months, but there is still a high likelihood that Indian equities end up outperforming global equities given the stronger underlying growth dynamics,” Narayan said.

Aggressive rate hikes: With the sharp rise in US inflation that beat street expectations, all eyes are on the US Federal Open Market Committee (FOMC) meeting scheduled on Wednesday as investors' fear aggressive rate hikes on the anvil. European Central Bank (ECB) said it would not just end quantitative easing (QE) and start hiking rates but will also follow it up with a potentially larger move in September.

Sustained foreign investment withdrawal: Foreign investors continued to withdraw from Indian equity markets and pulled out close to Rs 14,000 crore this month so far. With this, net outflow by foreign portfolio investors (FPIs) from equities reached Rs 1.81 lakh crore so far in 2022, data with depositories showed.

Covid concerns: Beijing's most populous district of Chaoyang announced three rounds of mass testing on Sunday to quell a "ferocious" COVID-19 outbreak that emerged at a bar in a nightlife and shopping area last week, spurring concern of more growth-strangling lockdowns in only a short time after the city relaxed curbs to quell an outbreak from April.

Crude oil rates: Oil prices slipped more than $2 on Monday but remained close to $120/barrel as a flare-up in COVID-19 cases in Beijing quelled hopes for a rapid pick-up in China's fuel demand while worries about global inflation and economic growth further depressed the market.

Falling Rupee: The Indian rupee plunged to an all-time low on Monday as it breached the 78-mark against the US dollar for the first time. Elevated global crude oil prices, a strengthening of the dollar and a continuous outflow of foreign funds from the local market have kept the domestic currency under pressure for the last few sessions. The rupee lost 21 paise against the greenback last week.