Indian stock markets ended their recent recovery on Monday, with the Sensex dropping 876 points and the Nifty falling below the 23,000 level. Losses in private sector banks and information technology stocks weighed on investor sentiment.
Market participants evaluated quarterly earnings from major lenders, while high crude oil prices and uncertain global signals added to concerns.
The BSE Sensex declined 876.37 points, or 1.17%, to close at 73,852.90. The NSE Nifty 50 fell 257.20 points, or 1.11%, to settle at 22,888.95.
The decline followed a strong rally last week, with investors booking profits in several heavyweight stocks. Market breadth was largely negative, as 15 of the 16 major sectoral indices ended in the red. The Nifty’s fall below 23,000 reflected investor caution amid volatility surrounding corporate earnings.
PRIVATE BANKS LEAD THE DECLINE
Private sector banks were among the biggest contributors to the market’s losses as investors reacted to the latest quarterly results from HDFC Bank and Axis Bank.
The Nifty Private Bank index fell 1.85%, while the Nifty Financial Services 25/50 index dropped 1.38%. Axis Bank shares declined 4.15%, HDFC Bank lost 2.72%, Yes Bank fell 2.63% and Kotak Mahindra Bank slipped 1.87%.
HDFC Bank reported a 4.7% year-on-year increase in net profit for the September quarter to Rs 19,510 crore. However, lower other income, higher operating expenses and provisions affected sentiment. Its net interest margin narrowed to 3.16% from 3.30% in the preceding quarter.
Axis Bank reported standalone net profit of Rs 7,003 crore, slightly below analysts’ expectations of Rs 7,124 crore. Higher operating costs and weaker other income also weighed on the bank.
The market response indicates that investors are examining banks’ margins, expenses and asset quality rather than focusing solely on headline profit growth.
IT STOCKS REVERSE RECENT GAINS
Information technology shares also declined after leading the market’s recovery in recent sessions. The Nifty IT index dropped 1.28%, reversing some of its 3.9% gain in the previous session.
The Nifty Financial Services Ex-Bank index fell 1.29%, while the Nifty MidSmall IT and Telecom index declined 0.69%. Auto stocks slipped 0.69%, the Nifty Metal index lost 0.55% and the Nifty Pharma index dropped 0.65%.
The Nifty FMCG index declined 1.44%, while the Realty index fell 1.20%. The Nifty Chemicals index was among the weaker sectoral indices, losing 1.59%.
PSU BANK STOCKS BUCK THE TREND
Public sector banks were a notable exception to the widespread selling. The Nifty PSU Bank index gained 2.46%, supported by advances in Punjab National Bank and Union Bank of India.
Punjab National Bank shares jumped 4.8% after the lender reported an improvement in its net interest margin. Union Bank of India rose 5.3% after posting higher profits and better asset quality compared with the previous quarter.
The contrasting performance of private and public sector lenders reflected different investor reactions to quarterly results. Banks reporting improvements in margins and asset quality attracted buying interest.
BROADER MARKETS ALSO END LOWER
The weakness extended across the broader market indices. The Nifty 100 declined 0.98%, the Nifty 200 fell 1.01% and the Nifty 500 dropped 1.03%.
The Nifty Midcap 50 lost 1.05%, the Nifty Midcap 100 slipped 1.09% and the Nifty Smallcap 100 fell 1.01%. The declines indicated that selling pressure affected large-, mid- and small-cap stocks alike.
India VIX, a measure of expected market volatility, climbed 4.48% to 14.69, indicating heightened investor nervousness.
CRUDE OIL, GLOBAL CUES KEEP SENTIMENT CAUTIOUS
Crude oil prices remained elevated despite easing during the trading session. Brent crude was quoted at $108.57 per barrel, down 1.17%, while US West Texas Intermediate crude declined 0.13% to $101.28.
Vinod Nair, Head of Research at Geojit Investments Limited, said domestic equities faced renewed selling pressure as weak global signals and declines in private banking and IT shares weighed on the market.
He said private sector banks remained under pressure following their quarterly results and concerns about margins. Public sector banks, meanwhile, performed better amid expectations of relatively stable margins and asset quality.
Nair also said crude prices had eased after the US waived key sanctions linked to Russia, raising expectations that Russian fuel supplies to global markets could increase. However, oil prices remained high, with geopolitical tensions continuing to shape the outlook.
He added that the Nifty’s decline below 23,000 and weak market breadth reflected investor caution amid earnings-related volatility and uncertainty in global markets.
Investors will monitor upcoming quarterly results, crude oil developments and global market signals for further direction. Jio Platforms, the country’s largest-ever IPO, is also attracting attention ahead of its subscription opening on Wednesday.
The immediate focus will be on whether the Nifty can regain the 23,000 level and whether buying interest returns to private banking and IT stocks. With mid- and small-cap shares also under pressure, a sustained recovery may depend on broader market participation and corporate earnings meeting expectations.
Financial markets will remain closed on Tuesday due to a local holiday, with trading scheduled to resume on Wednesday.
