Both Sensex and Nifty opened lower on Monday as investors assessed September-quarter earnings from major private lenders HDFC Bank and ICICI Bank, while elevated crude oil prices weighed on sentiment.
The BSE Sensex opened at 74,594.65, falling 134.62 points, or 0.18%. The NSE Nifty 50 opened at 23,096.85, down 49.30 points, or 0.21%.
The weak opening follows a strong rally last week, when the Sensex surged 2,256.94 points, or 3.11%, while the Nifty gained 625.7 points, or 2.77%. Both benchmarks recorded their strongest weekly performances in around six months, supported by a rebound in information technology stocks following better-than-expected quarterly earnings.
HDFC Bank, ICICI Bank results in focus
Investors are closely tracking the September-quarter earnings season, with the performance of heavyweight banking stocks likely to influence the broader market.
HDFC Bank reported a second-quarter profit that narrowly missed analyst estimates, as weaker treasury income and higher provisions for bad loans offset robust lending growth.
ICICI Bank, meanwhile, posted a better-than-expected September-quarter profit, supported by stronger loan growth and lower provisions for bad loans.
{{/usCountry}}ICICI Bank, meanwhile, posted a better-than-expected September-quarter profit, supported by stronger loan growth and lower provisions for bad loans.
{{/usCountry}}The two lenders are among the largest constituents of the Nifty 50, making their share-price movements particularly important for the benchmark index.
"A positive reaction to private-bank earnings could help the market absorb higher oil prices, with Nifty facing immediate resistance at 23,150 levels," Hariselvan Radhakrishnan, founder and CEO of HST Wealth, said.
Crude oil prices remain a concern
Elevated crude oil prices continued to weigh on market sentiment, with Brent crude trading at around $108 a barrel after easing from the $110 level reached on Friday.
Although US President Donald Trump waived sanctions and tariffs on Russia, potentially paving the way for higher Russian fuel exports and easing supply concerns, persistent tensions in the Middle East continued to support oil prices.
The sustained rise in crude oil prices remains a concern for India, a major oil importer, as higher energy costs can put pressure on inflation, the country's import bill and corporate margins.
"The pullback from $110 to $108 remains too modest to materially improve India's macroeconomic outlook," Radhakrishnan said.
Foreign investors return as buyers
Foreign portfolio investors turned net buyers of Indian equities on Friday after 15 consecutive sessions of selling, purchasing shares worth ₹11.66 billion ($122.79 million), according to provisional data.
Domestic institutional investors, however, recorded net outflows of ₹36.61 billion, indicating that domestic selling continued to offset some of the support from foreign investors.
The return of foreign buying comes after last week's broad-based rally, which also lifted the combined market capitalisation of nine of India's 10 most valued companies by ₹3.65 lakh crore.