Closing Bell: Nifty 50 Falls 0.39%, Sensex Drops 443 Points as HDFC Bank, Axis Bank Weigh on Markets

The Indian stock market ended lower on Monday, July 20, with the Nifty 50 and Sensex extending losses as heavyweight private Banking stocks came under pressure following quarterly earnings. Weakness in HDFC Bank and Axis Bank, along with lingering geopolitical concerns over the Middle East, weighed on investor sentiment despite gains in select sectors.

The Nifty 50 opened at 24,190.05 and slipped to an Intraday low of 24,135.85 during the afternoon as selling pressure intensified. The benchmark later recovered more than 120 points from the day's low and touched an intraday high of 24,266.10 after buyers emerged at lower levels. However, the index failed to hold above the 24,250 mark and traded in a narrow range during the final hour.

At the closing bell, the Nifty 50 settled at 24,241.35, down 95.80 points, or 0.39 per cent. The Sensex declined 442.92 points, or 0.57 per cent, to end at 77,708.53. The Bank Nifty also underperformed, falling 0.98 per cent, or more than 500 points. India VIX eased around 1 per cent to remain below the 13 level.

Brent crude oil gave up a large part of its early gains and traded around USD 88 per barrel after briefly crossing USD 91 during the session. The decline came after reports suggested renewed diplomatic efforts between the U.S. and Iran to ease tensions, reducing immediate concerns over potential supply disruptions. Iran's Foreign Ministry said it had received proposals from international mediators aimed at lowering regional tensions, although no additional details were disclosed.

The Indian rupee weakened to its lowest level in two months as elevated crude oil prices and continued Middle East tensions kept pressure on the domestic currency. The rupee fell 0.27 per cent from Friday's closing level to 96.53 against the U.S. dollar, its weakest level since May 21 and close to its record low of 96.96 touched earlier this year. Dollar sales by state-owned banks helped limit further depreciation.

Sectoral performance remained mixed, with six of the eleven major sectoral indices ending higher. The Nifty PSU Bank index emerged as the top performer, climbing 2.78 per cent to its highest level of July. In contrast, the Nifty Financial Services index declined 1.22 per cent, making it the worst-performing sector as HDFC Bank and Axis Bank witnessed heavy selling.

The broader market outperformed the benchmark indices. The Nifty Midcap 100 gained 0.60 per cent, while the Nifty Smallcap 100 advanced 0.16 per cent.

Among individual stocks, HDFC Bank fell 5.12 per cent, recording its sharpest intraday decline in four months after a sharper-than-expected decline in net interest margins overshadowed its in-line first-quarter earnings. Axis Bank dropped 5.46 per cent after brokerages flagged softer-than-expected margins despite its Quarterly Results, while Kotak Mahindra Bank lost 2 per cent following similar concerns over first-quarter margins.

On the positive side, ICICI Bank gained 1.10 per cent after reporting stronger-than-expected first-quarter earnings supported by healthy loan growth. Reliance Industries rose 0.30 per cent as its first-quarter profit beat estimates, driven by strong performance in its oil-to-chemicals and telecom businesses.

Among energy stocks, ONGC gained 0.93 per cent while Oil India rallied 4.18 per cent as higher crude oil prices are expected to improve revenue realisations and profitability for upstream producers. VA Tech Wabag jumped 6.32 per cent after securing wastewater treatment facility contracts.

ICICI Bank contributed the most to the Nifty 50's gains, adding 24.84 points to the index. Bharti Airtel supported the benchmark with a contribution of 21.23 points, while State Bank of India added 14.14 points.

On the downside, HDFC Bank emerged as the biggest drag on the index, erasing 140.21 points. Axis Bank reduced the index by 45.47 points, while Kotak Mahindra Bank shaved off another 12.68 points.

Market breadth remained tilted towards declines. Out of 3,390 stocks traded on the NSE, 1,779 advanced, 1,501 declined and 110 closed unchanged. A total of 77 stocks touched fresh 52-week highs, while 56 stocks hit their 52-week lows. Meanwhile, 88 stocks were locked in their Upper Circuits and 90 stocks ended in Lower Circuits.

Disclaimer: The article is for informational purposes only and not investment advice.