- Indian equity benchmarks opened lower amidst weak global cues.
- Rising crude oil prices and banking stock sell-off weighed heavily.
- Oil surge due to US-Iran tensions heightens inflation concerns.
Indian equity benchmarks opened in the red on Monday, tracking weak global cues as rising crude oil prices and selling pressure in banking stocks dampened investor sentiment.
The BSE Sensex declined more than 500 points and tested 77,500, while the NSE Nifty50 slipped a little over 150 points and traded under 24,200, as markets opened.
The subdued opening follows a strong rally on Friday, when the Sensex climbed 964.58 points and the Nifty gained 261.55 points amid optimism surrounding corporate earnings.
Banking Stocks Under Pressure
Banking shares were among the biggest drags on the market despite several lenders reporting their June quarter earnings over the weekend.
Axis Bank fell 4.31 per cent in early trade, while HDFC Bank dropped 4.15 per cent. Kotak Mahindra Bank declined 2.46 per cent and InterGlobe Aviation (IndiGo) slipped 1.58 per cent.
Among the gainers on the Sensex, Tech Mahindra advanced 1.88 per cent, followed by ICICI Bank, which also rose 1.88 per cent. Reliance Industries gained 0.99 per cent, HCL Technologies added 0.88 per cent and Bharti Airtel was up 0.59 per cent.
Crude Oil Emerges As A Key Market Trigger
Market participants are closely monitoring developments in West Asia after renewed tensions between the United States and Iran pushed crude oil prices sharply higher.
Brent crude rose 2.71 per cent to $90.49 a barrel after gaining nearly 16 per cent last week, while US benchmark WTI crude increased 2.34 per cent to $84.42 per barrel.
Higher crude prices are being watched closely as they could fuel inflationary pressures and increase costs for oil-importing countries such as India.
Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said markets are currently facing both positive and negative influences.
“There are near-term headwinds and tailwinds for the market now. The strongest headwind is Brent crude spiking above $90 on escalating tensions between US and Iran. If this trend continues, India’s vulnerability to energy shock will resurface with negative implications for the rupee and FPI flows,” he said.
At the same time, he noted that the weakening of the artificial intelligence-driven rally in markets such as the US, South Korea and Taiwan could work in India’s favour.
“This can make markets like India attractive to the FPIs,” Vijayakumar added.
Global Markets Remain Weak
Asian markets traded lower on Monday after US equities ended the previous week in negative territory, weighed down by continued selling in semiconductor stocks.
At around 7.35 am, GIFT Nifty was trading near 24,300, indicating a discount of roughly 300 points compared with the previous Nifty futures close, signalling a cautious start for domestic equities.
Earnings Season In Focus
Investors will also track the June quarter earnings season, with results from banking majors and large corporates expected to influence stock-specific moves.
Reliance Industries reported growth across its businesses for the first quarter of FY27. Revenue from operations rose 4.4 per cent quarter-on-quarter to Rs 3,11,850 crore, while net profit increased 23.4 per cent to Rs 20,946 crore. EBITDA grew 10 per cent year-on-year to Rs 54,067 crore.
Among lenders, HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, Yes Bank, Punjab National Bank, IDBI Bank, RBL Bank and Punjab & Sind Bank have announced their quarterly results, keeping the banking sector firmly in focus.
Institutional Flows And Technical Levels
Foreign Institutional Investors (FIIs) remained net sellers on July 18, offloading equities worth Rs 376.41 crore, according to exchange data. Domestic Institutional Investors (DIIs), meanwhile, purchased shares worth Rs 1,017.89 crore.
In the derivatives market, the Put-Call Ratio for the Nifty stood at 1.61. Analysts noted significant put additions around the 23,200 strike, while the highest call open interest remained concentrated at the 25,000 strike.
The Nifty ended Friday’s session at 24,334.30 after breaking out of its recent consolidation range. Analysts are watching the 24,400-24,500 zone as an immediate resistance area, while support is seen around the 24,100-24,000 range.
