Stock markets tumble in early trade dragged by HDFC Bank, spike in crude oil prices
Sensex and Nifty declined sharply in early trade as HDFC Bank and Axis Bank shares fell after earnings, while rising crude prices amid US-Iran tensions increased market concerns. Reliance Industries gained following record quarterly results, offering some support to investors
Mumbai: Benchmark indices Sensex and Nifty tumbled in early trade on Monday, dragged by heavy selling in blue-chip HDFC Bank and a sharp spike in crude oil prices due to the ongoing tensions between the US and Iran.
The 30-share BSE Sensex tanked 523.22 points to 77,628.23 in early trade. The 50-share NSE Nifty declined 134.10 points to 24,198.25.
From the Sensex pack, Axis Bank and HDFC Bank declined nearly 5 per cent after announcing their quarterly earnings over the weekend.
“HDFC Bank has disappointed, particularly on the NIM front,” VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.
Kotak Mahindra Bank, InterGlobe Aviation, Maruti and Bajaj Finance were also among the laggards from the blue-chip pack.
Bharti Airtel, Tech Mahindra, NTPC, Reliance Industries and ICICI Bank were among the gainers.
Reliance Industries Ltd, India’s most valuable company, traded nearly 1 per cent higher after it reported record quarterly core profit and EBITDA for the June quarter, powered by strong performances across its oil-to-chemicals and telecom businesses.
Brent crude, the global oil benchmark, quoted 2.41 per cent higher at USD 90.22 per barrel.
“There are near-term headwinds and tailwinds for the market now. The strongest headwind is Brent crude spiking above USD 90 on escalating tensions between the US and Iran. If this trend continues, India’s vulnerability to energy shock will resurface with negative implications for the rupee and FPI flows,” Vijayakumar said.
On the positive side, the weakening of the AI trade continues in markets like the US, South Korea and Taiwan, he said, adding that this can make markets like India attractive to the FPIs.
In Asian markets, Shanghai’s SSE Composite index and Hong Kong’s Hang Seng index quoted higher, while South Korea’s KOSPI tanked 4.35 per cent.
US markets ended lower on Friday.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 376.41 crore on Friday, according to exchange data.
On Friday, the Sensex bounced back 964.58 points, or 1.25 per cent, to settle at 78,151.45. The Nifty climbed 261.55 points, or 1.09 per cent, to end at 24,334.30.
