After the robust gains of last week, Indian equities came under selling pressure on Monday as elevated crude oil prices amid geopolitical tensions in West Asia and profit-booking in private banking stocks following Q3 results weighed on investor sentiment.
The Benchmark NSE Nifty50 declined 1.11% to close at 22,888, while the BSE Sensex fell 1.17% to 73,852. The broader market also witnessed pressure, with the Nifty Midcap 100 declining 1.09% and the Nifty Smallcap 100 falling 1.01%.
Monday’s selling pressure came after the benchmark indices – Sensex and Nifty – gained about 3% each last week.
"Indian equities came under renewed selling pressure, reversing the recent recovery as weak global cues and selling in private banks and IT stocks weighed on investor sentiment. Global markets remained cautious ahead of a busy week of corporate earnings,” said Vinod Nair, Head of Research, Geojit Investments Limited.
He added private banks remained under pressure following quarterly earnings and concerns over margin trends, while PSU banks bucked the broader weakness, supported by expectations of relatively resilient margins and asset quality.
Shares of Axis Bank fell more than 4% on Monday after its net profit narrowly missed analyst estimates. The lender reported a net profit of Rs 7,003 crore in the July-September period, marking an increase of 38% from Rs 5,090 crore in the same period last year. Shares of HDFC Bank also plunged more than 2% on Monday following its Q2 results.
Other top laggards in the Nifty50 pack were Tata Motors Passenger Vehicle, Infosys and Bajaj Finance.
Meanwhile, Brent crude oil prices remained elevated at above $108 per barrel despite the United States waiving key sanctions linked to Russia, raising expectations of increased Russian fuel supplies to the global market. For an oil-importing economy like India, elevated crude prices increase inflationary pressures, widen the import bill, put pressure on the rupee and squeeze corporate margins.
Ajit Mishra, SVP – research, Religare Broking said that global and domestic macroeconomic concerns continued to weigh on sentiment.
“Brent crude remained elevated around $107–108 per barrel amid geopolitical tensions and supply-side uncertainties, raising concerns over imported inflation. Investors also remained watchful of foreign fund flows and global market trends. Meanwhile, the ongoing earnings season continued to drive stock-specific action, with market participants assessing corporate profitability, margins and management commentary for further direction,” added Mishra.