Sensex falls 558 points, Nifty under 23,000 as private banks drag markets; Axis Bank, HDFC Bank weigh

Indian equity benchmarks were trading lower on Monday as private bank stocks came under pressure following the latest round of September-quarter earnings.

At the time or reporting, the BSE Sensex was down 557.58 points, or 0.75%, at 74,171.71. The Nifty 50 was down 66.10 points, or 0.69%, at 22,985.45.

The fall was fairly broad across the market. Of the 3,397 stocks traded on the NSE, 2,286 were in the red, while 1,002 were advancing and 109 were unchanged.

Private banks were among the biggest drags. The Nifty Private Bank index fell 1.45%. Axis Bank was the worst-performing Nifty stock, declining more than 4%, while HDFC Bank fell 2.15%.

Both stocks came under pressure after their September-quarter results. Axis Bank reported a strong year-on-year rise in profit, but the number was slightly below market expectations. Higher operating expenses and weaker non-interest income also weighed on the stock. HDFC Bank reported a 4.7% rise in standalone net profit. However, investors remained concerned about margins and the pace at which earnings can grow from here.

The reaction to private bank stocks came despite an improvement in asset quality at several lenders. ICICI Bank, Axis Bank and HDFC Bank all reported lower gross non-performing asset ratios in the September quarter. ICICI Bank’s net profit rose 20.1% year-on-year, while Axis Bank reported a 38% increase.

Infosys was another major drag on the Nifty, falling 1.60%. Trent declined 1.44%, while Hindustan Unilever was down 1.38%.

Global markets were another negative cue for Indian equities. US stocks ended lower on Friday as technology and semiconductor shares came under pressure. Concerns around the high valuations of AI-related companies also continued to weigh on investors. Asian markets followed the weakness. Japan’s Nikkei and South Korea’s Kospi were both down more than 1% in early trade.

Crude prices remained another concern for India. Brent crude was around $108 a barrel after easing from recent highs. With oil still elevated, investors remain concerned about its impact on India’s inflation, current account and the rupee.

The situation around the Strait of Hormuz has added another layer of uncertainty to the oil market, with investors watching for any development that could affect energy supplies.

Axis Bank, HDFC Bank among top Nifty losers; UltraTech leads gainers

UltraTech Cement bucked the overall market sentiment, and was the biggest gainer on the Nifty 50, rising 2.43%. Eicher Motors was up 1.90%, while Larsen & Toubro gained 1.49%. Maruti Suzuki and ONGC rose 1.34% and 1.16%, respectively.

On the other side, Axis Bank led the losses with a 3.84% fall. HDFC Bank was down 2.15%, followed by Infosys at 1.60%, Trent at 1.44% and Hindustan Unilever at 1.38%.

The sectoral picture was mixed. PSU banks were the strongest performers, with the Nifty PSU Bank index gaining 2.27%. Nifty Cement rose 0.80%, while Nifty Oil & Gas was up 0.55%.

Private banks remained the biggest sectoral loser, falling 1.45%. Nifty Chemicals declined 0.98%, while the Nifty Financial Services 25/50 index was down 0.84%.

India VIX, which tracks expected market volatility, was up 2.36% at 14.40.

Urban Company falls 8% after loss widens

Urban Company shares fell around 8% after the home-services company reported a wider loss for the September quarter.

Its consolidated net loss increased to ₹182.48 crore from ₹59.33 crore a year earlier, even as revenue rose 41.4% to ₹537.29 crore.

The bigger loss was mainly linked to spending on InstaHelp, the company’s quick home-services business. The segment reported an adjusted EBITDA loss of ₹174 crore during the quarter.

Urban Company has also approved a plan to raise up to ₹2,500 crore through a qualified institutional placement. The funds are expected to be used to support growth, including InstaHelp, as well as potential acquisitions.

What analysts are saying

Ponmudi R, CEO of Enrich Money, said crude prices and the situation in West Asia were keeping investors cautious.“Persistently high crude oil prices and geopolitical uncertainty are keeping macroeconomic risks in focus for Indian equities,” he said.

According to Ponmudi, the direction of crude prices will remain important for Indian markets. Any easing of tensions could bring some relief, while a prolonged disruption to oil supplies could keep volatility high. “A diplomatic resolution could ease crude prices and support sentiment, while escalation or prolonged disruption could increase volatility,” he said.

Hariselvan Radhakrishnan, founder and CEO of HST Wealth, said domestic earnings were providing some support, but global markets remained a concern. He pointed to the weakness in US technology and semiconductor stocks and the continuing debate around high AI valuations.

Crude at around $108 a barrel and the US 10-year Treasury yield above 5% are also factors investors are watching, he said. For Indian equities, a sustained fall in crude could provide some relief, while another rise could keep pressure on the market.