Sensex, Nifty end lower amid volatile trade and profit booking

Benchmarks witnessed a volatile session on Monday, with the Sensex falling more than 1,000 points intraday before recovering some losses. The Nifty 50 fell 257.20 points, or 1.11 per cent, to close at 22,888.95, while the BSE Sensex declined 876.37 points, or 1.17 per cent, to settle at 73,852.90. The Bank Nifty shed 355.90 points to end at 55,488.10.

Profit booking after last week’s rally, weak global cues, foreign fund outflows and concerns over elevated crude oil prices weighed on sentiment, while investors also reacted to September-quarter earnings from major companies.

The sell-off gathered momentum in the afternoon as heavyweight stocks came under pressure. Private-sector banks were among the key drags following earnings announcements, while information technology stocks retreated after their recent gains. The decline also extended to midcap and smallcap stocks, reflecting broader risk aversion. Elevated crude prices amid geopolitical tensions added to concerns over India’s import bill and inflation.

“Markets traded volatile on Monday and declined over 1 per cent amid weak market cues,” said Ajit Mishra, Senior Vice President – Research, Religare Broking, adding that sustained selling in heavyweight stocks dragged the Nifty lower as the session progressed.

Private-sector banks were among the biggest drags after investors assessed September-quarter earnings and concerns over net interest margins, operating costs and treasury income. HDFC Bank, ICICI Bank and Axis Bank together accounted for more than half of the Sensex’s decline. Axis Bank fell around 4-5 per cent despite reporting a 39.4 per cent year-on-year (y-o-y) rise in consolidated net profit, while HDFC Bank declined nearly 3 per cent despite a 4.7 per cent increase in profit.

Public-sector banks bucked the broader trend, with the Nifty PSU Bank index gaining around 2.5 per cent. Punjab National Bank and Union Bank of India advanced on quarterly earnings and operating performance, while buying interest in State Bank of India and Bank of Baroda also supported the sector.

Selling extended beyond banking stocks. The Nifty Midcap 100 declined 1.09 per cent and the Nifty Smallcap 100 fell 1.01 per cent. FMCG, information technology, realty and private banking stocks were among the major laggards, while the Nifty PSU Bank index was the only major sectoral index to close in positive territory.

Global uncertainty and elevated crude oil prices continued to weigh on domestic equities. Brent crude traded around $107-108 a barrel amid geopolitical tensions and supply concerns, raising the risk of imported inflation for India. Investors also tracked foreign portfolio investor flows and global technology stocks ahead of a busy week of corporate earnings.

In the currency market, the rupee extended its appreciation streak to seven consecutive sessions, closing marginally higher after surrendering most of its intraday gains. A stable US dollar and Reserve Bank of India intervention supported the currency, while higher crude prices and profit booking in equities limited its advance. Spot $/INR is expected to find support at 94.70, with resistance at 95.50, according to Dilip Parmar, Research Analyst at HDFC Securities. Gold traded largely flat near ₹1,47,900 per 10 grams, tracking international prices around $4,165 an ounce, as a stronger dollar limited gains.

Going ahead, markets are likely to remain volatile as investors assess corporate earnings, crude oil prices, geopolitical developments and foreign fund flows. The Nifty faces immediate resistance around 23,200-23,300, while the 22,550-22,750 range is a key support zone. A sustained recovery will depend on improved global cues and greater stability in private-sector banking stocks.

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