Sensex Drops Nearly 600 Points as Private Banks Drag Markets Lower

Indian equities traded with a bearish bias around noon on Monday, with heavy selling in private Banks wiping out part of Friday’s rally. The Sensex was down about 585 points, or 0.76 per cent, at 77,566.17, while the Nifty 50 fell 147 points, or 0.60 per cent, to 24,187.25.

The broader market showed better resilience than the headline indices. The Nifty Midcap and Smallcap indices gained around 0.2 per cent each, indicating that selling remained concentrated in heavyweight financial stocks. Bank Nifty, however, declined nearly 1.5 per cent as weakness in HDFC Bank, Axis Bank and Kotak Mahindra Bank weighed on the index.

Sectorally, Nifty PSU Bank advanced about 1.4 per cent, while Nifty Metal rose 1.2 per cent and Nifty Pharma gained around 1 per cent. Punjab National Bank and Canara Bank led the PSU banking pack, while JSW Steel, Vedanta and Welspun Corp supported metals. The pharma advance also suggested some defensive positioning amid geopolitical uncertainty.

On the losing side, Nifty Private Bank fell nearly 2.8 per cent, while financial services dropped around 1.9 per cent. Realty and auto stocks also traded under pressure, although their declines were relatively contained compared with private lenders.

Among individual stocks, HDFC Bank slipped about 4.6 per cent after its June-quarter net interest margin declined to 3.26 per cent, raising concerns over near-term profitability. Axis Bank lost more than 5 per cent as investors focused on margin pressure despite a 23 per cent rise in quarterly profit. Reliance Industries gained around 1.4 per cent after its Q1 performance beat expectations, supported by the oil-to-chemicals and digital businesses. Sansera Engineering jumped nearly 7 per cent after Goldman Sachs initiated coverage with a Buy rating and a target price of Rs 4,130.

Since Monday’s provisional institutional-flow figures will be released after the market closes, the latest available cash-market data is for Friday. FIIs were net sellers of shares worth Rs 376.41 crore, while DIIs bought equities worth Rs 1,017.89 crore.

Global cues remained cautious. Wall Street ended lower on Friday, with the Dow falling 0.77 per cent, the S&P 500 losing 1.01 per cent and the Nasdaq declining 1.40 per cent amid a broad Semiconductor sell-off. Asian markets were mixed, with the Nikkei down about 4 per cent and Hong Kong’s Hang Seng gaining around 1.6 per cent. Brent crude climbed above USD 90 per barrel as US-Iran tensions intensified, adding pressure on the rupee and India’s inflation outlook.

For the remainder of the session, traders will watch whether the Nifty can defend the 24,200 to 24,000 support zone. On the upside, 24,400 to 24,500 remains the immediate resistance area. Private-bank earnings, crude oil movements and upcoming Q1 results from UltraTech Cement, Paytm and other companies may guide near-term sentiment.

This is Market commentary rather than a recommendation to buy or sell any security.

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