Sensex tumbles 700 pts, Nifty slips below 24,200 as private banks drag; HDFC Bank, Axis, Kotak Mahindra Bank lead fall
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Indian benchmark indices opened sharply lower on Monday, with banking heavyweights dragging the market after a mixed start to the first-quarter earnings season. Escalating geopolitical tensions in the Middle East and a spike in crude oil prices further dented investor sentiment.
In the first hour of trade, the BSE Sensex declined as much as 706 points, or 0.9%, to hit an intraday low of 77,444.79, while the NSE Nifty fell 184 points, or 0.75%, to 24,149.90.
At 9:45 a.m., the 30-share Sensex was down 661 points, or 0.85%, at 77,491, while the Nifty50 declined 167 points, or 0.69%, to 24,167.
The broader markets remained relatively resilient despite the weakness in the benchmarks, with the Nifty Midcap 100 edging up 0.12% and the Nifty Smallcap 100 gaining 0.26%. India VIX, the market's fear gauge, rose 3.46% to 13.61, signalling higher volatility.
Private banking stocks lead sell-off
The sell-off was led by private banking stocks following their quarterly earnings. Axis Bank slumped 5.45%, while HDFC Bank fell 4.64%, emerging as the top losers on the Nifty. Kotak Mahindra Bank also declined 2.85%, weighing heavily on the benchmark indices.
Other notable laggards included InterGlobe Aviation (IndiGo), down 1.63%, followed by Maruti Suzuki (-1.34%), Bajaj Finance (-0.77%), Mahindra & Mahindra (-0.75%), Bharat Electronics (BEL) (-0.61%), and Hindustan Unilever (-0.55%).
On the gaining side, Trent rose 2.4%, followed by NTPC (1.18%), Bharti Airtel (1.14%), Tech Mahindra (1%), Reliance Industries (0.61%), and HCLTech (0.52%). Reliance remained in focus after reporting record quarterly revenue, while Tech Mahindra extended Friday's gains following its stronger-than-expected June-quarter results.
Sectorally, financial stocks bore the brunt of the selling. The Nifty Private Bank index dropped 2.73%, while the Nifty Financial Services index fell 1.45%. The Nifty Auto and Nifty Realty indices also traded lower.
In contrast, defensive and commodity-linked sectors outperformed. The Nifty Media index gained 1.51%, followed by the Nifty PSU Bank (0.85%), Nifty Pharma (0.65%), Nifty Oil & Gas (0.62%), Nifty Metal (0.61%), and Nifty Healthcare (0.58%). The Nifty IT index was marginally higher, extending Friday's earnings-led rally.
Rising Brent crude remains a key headwind
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said markets are facing both near-term headwinds and tailwinds.
"The strongest headwind is Brent crude spiking above $90 amid escalating tensions between the US and Iran. If this trend continues, India's vulnerability to an energy shock will resurface, with negative implications for the rupee and foreign portfolio investment (FPI) flows," he said.
On the positive side, he noted that the unwinding of AI-driven trades in markets such as the US, South Korea, and Taiwan could redirect foreign portfolio flows towards India. He also said the June-quarter earnings season has begun on a promising note, with Reliance Industries and ICICI Bank delivering strong results, although HDFC Bank disappointed on net interest margins.
Ponmudi R, CEO of Enrich Money, said the first-quarter earnings season is likely to dictate the market's near-term direction.
"Rather than witnessing a broad-based directional move, investors are likely to focus on company-specific opportunities, with quarterly earnings, management commentary, and forward guidance from heavyweight companies shaping sectoral performance. Until there is greater clarity on geopolitical developments, stock-specific movements are expected to dominate trading, while the broader indices remain sensitive to shifts in global risk sentiment and fluctuations in crude oil prices," he said.
Sachin Gupta, Vice President – Technical Research at Choice Broking, said weak global cues may keep the market under pressure at the open, but the domestic technical structure remains constructive.
"Despite the weak global backdrop, the domestic market continues to exhibit a resilient technical structure, suggesting that any decline may attract buying at lower levels," Gupta said.
According to Gupta, the immediate trading range for the Nifty is seen between 24,100 and 24,500, with aggressive put writing at the 24,100 strike indicating a strong support zone. On the upside, maximum call open interest at 24,500 and 24,600 suggests these levels could act as near-term resistance.
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