Banking stocks, high oil prices drag Indian markets lower
Across Asia, markets were mixed, with South Korea rebounding 1.8% from last week's losses amid simmering concerns over excessive investments in artificial intelligence (AI). Taiwan fell 0.6%, while Indonesia tumbled 3.6% following a warning from index provider MSCI that it would downgrade the country from the emerging market basket.
Mumbai saw Indian equity indices drop more than 1% on Monday, ending a two-day winning streak due to investor uncertainty echoing across Asia. Large private sector banks suffered the most significant losses after their September quarter earnings disappointed.
The Sensex fell 876.38 points, or 1.2%, to close at 73,852.90, while the Nifty 50 declined 257.20 points, or 1.1%, to 22,888.95. Garg, head of research at brokerage Lemonn, attributed the market's weakness to profit-taking following the prior week's recovery and concerns over oil prices and earnings announcements.
Last week, both indices gained around 2.8%. Throughout Asia, markets were mixed, with South Korea rebounding 1.8% from last week's losses, Taiwan down 0.6%, and Indonesia down 3.6% due to MSCI's warning of a downgrade for failing to manage artificial intelligence investments.
At home, the Volatility Index (VIX) rose 4.5% to 14.7, reflecting near-term market uncertainty. Most sectoral indices closed in the red, with the Nifty Private Bank index shedding 1.8%. Axis Bank was the worst performer in the Nifty, falling 4.19%, followed by HDFC Bank (2.3%) and ICICI (1.1%).
While HDFC and Axis Bank's second-quarter results fell short of expectations, ICICI's earnings exceeded forecasts. IT stocks, once top performers, erased some gains, with the Nifty IT index declining 1.2%. The Nifty PSU Bank index managed a 2.5% gain, bucking the overall trend.
Brent crude futures fell 1.5% to $108.18 following President Trump's executive order lifting sanctions on Russian energy. Despite this, high oil prices persisted, keeping investor confidence cautious and concerns over inflation, India's import bill, and corporate profitability in focus. Among broader markets, the Nifty Midcap 150 index declined 1.09%, and the Nifty Smallcap 250 index fell 1.15%.
On the BSE, 3,153 of the 4,658 stocks traded lower, while 1,283 gained. Money managers noted that while broader corporate earnings growth has been strong, it has yet to impact market sentiment.
Written by urgent.news from The Economic Times - Top News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
