The Sensex fell 370.61 points and Nifty dropped to 23,065.90 on Monday. Selling in bank shares like HDFC Bank and weak global cues hurt investor sentiment. Crude prices above $108 a barrel also added pressure. Anand James said, "The 23600 view shall remain in play as long as dips do not stretch."
The equity benchmark indices traded lower on Monday, as investors assessed the results of top private lenders HDFC Bank and ICICI Bank, while crude prices above $108 a barrel weigh on risk sentiment.
At around 11 a.m., the Sensex was down 370.61 points or 0.5 percent at 74,358.66, while the broader Nifty declined to 23,065.90, down 80.25 points or 0.35 percent.
Key factors behind market decline
1) Selling in bank shares: HDFC Bank shares declined 2 percent, emerging among the top losers on the Nifty 50 after the private sector lender reported its second-quarter FY27 results over the weekend. Concerns over pressure on net interest margins and modest earnings growth weighed on sentiment, even as several major brokerages maintained bullish recommendations on the stock.
The decline came amid broader weakness in banking stocks, with the Bank Nifty slipping 0.5 percent.
2) Weak global cues: Asian equities traded lower, although they recovered some of their early losses, as concerns over the enormous funding requirements for artificial intelligence investments weighed on technology stocks ahead of a busy earnings week.
MSCI's broadest gauge of Asian equities declined 0.5 percent, while South Korea's Kospi recovered from an opening fall to gain 0.2 percent. Japan's Nikkei 225 futures slipped 1.3 percent, Hong Kong's Hang Seng futures declined 0.2 percent, and the Shanghai Composite fell 0.2 percent.
US equities ended sharply lower on Friday as renewed selling in artificial intelligence-related technology stocks and a jump in crude oil prices weighed on investor sentiment. The Nasdaq Composite plunged 2.19 percent to 26,128.13, recording the steepest decline among the major indices. The S&P 500 fell 1.22 percent to 7,649.71, while the Dow Jones Industrial Average slipped 0.55 percent to 51,891.77.
3) Higher crude prices: Brent crude fell 1.5 percent to $108.27 a barrel, while West Texas Intermediate declined 0.6 percent to $100.83 a barrel. Despite Monday's decline, crude prices remained elevated, with geopolitical tensions continuing to influence the outlook.
Technical Outlook
Anand James, Chief Market Strategist at Geojit Investments, said "A close above 20 day SMA for the first time since August raises the prospects of a sustainable push higher. That said, having risen over 4% from the lower bollinger band a mean reversion move will not be surprising. But the 23600 view shall remain in play as long as dips do not stretch much beyond 22780."