The Indian stock market traded in the red on Monday, with Sensex and Nifty erasing some of the gains recorded in the previous week as strong selling in heavyweight private banks along with other factors spooked investors.At 1.28 PM, Sensex dropped over 900 points to 73,798, while Nifty 50 lost over 250 points to trade below the 22,900 level. The selloff wiped off nearly Rs 2.34 lakh crore from the total market capitalisation of all companies listed on BSE, dragging it down to Rs 470 lakh crore.Axis Bank shares tumbled around 4% to lead losses on Sensex, while shares of HDFC Bank, Infosys, Trent, HUL, Bajaj Finserv, NTPC, Bajaj Finance and ICICI Bank fell up to 2%.
Bucking the trend, shares of Adani Ports and Maruti Suzuki gained up to 2%.Broader markets also slipped into the red, with Nifty Midcap 100 and Nifty Smallcap 100 indices falling up to 0.7%. Meanwhile, India VIX, which measures volatility in the market, jumped more than 3% to cross 14.Among the sectors, Nifty Private Bank dropped nearly 2% while Nifty FMCG and Nifty Financial Services fell over 1% each.
Nifty PSU Bank index however jumped around 2%, bucking the overall market weakness. The overall market breadth turned sharply negative, with NSE seeing 2,474 declines against 894 advances, while 94 stocks remained unchanged.Live EventsHere are the key factors pushing market down today:1) Heavyweight bank stocks fallThe heavyweight private bank stocks including Axis Bank and HDFC Bank were the top losers on the benchmark indices after their Q2 results failed to impress the market.
Axis Bank shares fell over 5% after the private lender reported a 38% year-on-year rise in standalone net profit to Rs 7,003 crore for Q2FY27, but missed analyst estimates.HDFC Bank shares fell over 2% after India’s largest private lender reported a net profit of Rs 19,510 crore for the second quarter of FY27, marking a 4.6% jump from Rs 18,641 crore posted in the same period last year. ICICI Bank and Yes Bank shares meanwhile dropped over 1% each.
Why the sharp divide2) Elevated oil pricesBrent crude futures declined more than 2% but still remained sharply higher than last week, trading at over $107 per barrel. WTI Crude futures meanwhile traded close to $100 per barrel. The decline came after US President Donald Trump's decision to waive sweeping sanctions on Russia, including on Russian energy. However, Secretary of State Marco Rubio said the President would take up to 60 days to assess the economic impact of the waiver.Brent crude briefly touched $110 a barrel last week, crossing that mark for the first time since May, as tensions and security threats in the Middle East raised concerns about the safety of shipping and the risk of tighter global energy supplies.3) Weak global cuesDalal Street is accompanying global market peers in the downturn.
Japan’s Nikkei fell 0.64% while Indonesia’s Jakarta Composite crashed more than 5%. South Korea’s Kospi gained around 2% as investors bought the dip in AI stocks. Notably, Indian stocks are seen to have the anti-AI advantage, hence rise in AI stocks often result in downturn on Dalal Street.Wall Street crashed on Friday, with the tech-heavy Nasdaq plunging over 2% and S&P 500 falling more than 1%.4) Profit bookingToday’s downturn on Dalal Street comes after the market recorded sharp gains over the past two sessions.
Nifty had gained over 2% between Thursday and Friday despite headwinds. Additionally, investors are on the edge today, expecting some expiry-day volatility for Nifty ahead of a market holiday on Tuesday.5) Persistent FII outflowsForeign investors remained net buyers of Indian equities on Friday, purchasing shares worth Rs 1,166 crore, according to provisional data on NSE. However, the purchase is negligible when compared to the massive outflows seen this month.
FIIs have remained net sellers of Indian equities in nine out of 11 sessions in October so far, heavily weighing on Indian markets.The momentum created by the 2.8% surge in Nifty last week and the good results from the banking majors after the better-than-expected results from the leading IT companies have the potential to keep the market resilient, said V K Vijayakumar, Chief Investment Strategist, Geojit Investments.
He however noted that the escalation of the tensions in Hormuz and the consequent surge in Brent crude to $109 will act as a strong headwind to the market.“Even though the attractive valuations of the large-caps and the appreciation of the rupee have turned the stance of FIIs towards India a bit positive, it is unlikely to sustain, given the high crude price. Large-caps outperforming the mid-and small-caps is a rational trend, and this is likely to sustain, going forward.
The market actions this week are likely to be stock-specific in response to the Q2 results,” he added.Technical view on NiftyMarkets may trade sideways with heightened intraday swings due to Monday’s weekly expiry settlement, said Hemang Gor, Senior Research Analyst – Derivatives & Technical Research, Axis Direct.Nifty holding 23,000 remains crucial, while 22,950- and 23,300-mark key support and resistance for the day, according to the analyst.Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser.
Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution.
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