Mumbai, July 20: Benchmark indices Sensex and Nifty closed lower on Monday, dragged down by heavy selling in blue-chip bank stocks HDFC Bank and Axis Bank amid margin-related concerns and a flare-up in US-Iran tensions.
The 30-share BSE Sensex declined 442.93 points, or 0.57 per cent, to settle at 77,708.52. During the day, it tanked 783.16 points, or 1 per cent, to 77,368.29.
The 50-share NSE Nifty edged lower by 95.80 points, or 0.39 per cent, to end at 24,238.50.
Among Sensex shares, Axis Bank was the biggest loser, dropping by 5.48 per cent after its quarterly results over the weekend. HDFC Bank declined by 5.12 per cent.
“HDFC Bank has disappointed, particularly on the NIM front,” V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.
Maruti, Kotak Mahindra Bank, Infosys, Tata Consultancy Services, Mahindra & Mahindra and Bharat Electronics were also among the laggards from the blue-chip pack.
Trent, Power Grid, NTPC and Bharti Airtel were among the gainers.
“Indian equity markets ended in the red as investors turned cautious amid escalating tensions in the Middle East and a global technology-led sell-off. Losses were compounded by a sharp decline in HDFC Bank after weaker-than-expected net interest margins disappointed investors, putting additional pressure on the banking sector and the broader benchmarks,” Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, said.
The global oil benchmark, Brent crude, receded from an early high of USD 90 per barrel, later trading lower by 0.05 per cent to USD 88.06 per barrel.
“The collapse of the June ceasefire between the US and Iran has pushed crude prices to touch USD 90 a barrel. Markets have started the week on a cautious note, reflecting rising pressure on the global economy. These tensions are expected to persist in the near term as US military actions expand and global travel advisories for US citizens remain in place,” Vinod Nair, Head of Research, Geojit Investments Limited, said.
Broader markets, however, closed higher with the BSE SmallCap Select index climbing 0.56 per cent and the MidCap Select index gaining 0.39 per cent..
Among sectors, Private Banks index declined the most by 2.15 per cent, followed by Top 10 Banks (1.89 per cent), Financial Services (0.97 per cent), Bankex (0.77 per cent) and MidSmall Private Banks Quality Tilt (0.60 per cent)..
On the other hand, PSU Bank was the biggest gainer, rising by 2.96 per cent. Utilities (1.73 per cent), Power (1.48 per cent), Healthcare (1.11 per cent), Commodities (0.81 per cent), Metal (0.79 per cent) and Oil & Gas (0.76 per cent) also closed higher.
“Markets remained under pressure on Monday and ended lower amid disappointing earnings from private banking majors and renewed geopolitical concerns. Sectoral participation remained mixed, with banking and financials emerging as the key laggards following the earnings reaction,” Ajit Mishra â?” SVP, Research, Religare Broking Ltd, said.
Investor sentiment remained subdued after quarterly earnings from major private banks disappointed on the margin front, triggering a sharp sell-off in banking heavyweights, he said. “At the same time, renewed geopolitical tensions in the Middle East pushed Brent crude prices above the USD 90 per barrel mark, reviving concerns over inflation,” Mishra added.
In Asian markets, Shanghai’s SSE Composite index and Hong Kong’s Hang Seng index ended higher, while South Korea’s KOSPI tanked 4.46 per cent. Markets in Japan were closed for a holiday.
European markets were trading mostly higher. US markets ended lower on Friday.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 376.41 crore on Friday, according to exchange data.
On Friday, the Sensex bounced back 964.58 points, or 1.25 per cent, to settle at 78,151.45. The Nifty climbed 261.55 points, or 1.09 per cent, to end at 24,334.30. (PTI)
