Indian equity markets ended lower on Monday as disappointing net interest margins at HDFC Bank and weakness in Axis Bank overshadowed strong results from ICICI Bank.
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Markets closed lower on Monday as disappointing net interest margins from a key private-sector lender and renewed geopolitical tensions in the Middle East kept investors cautious throughout the session, even as public-sector banks and pharma stocks provided some support.The Nifty 50 settled at 24,238.50, down 95 points or 0.39 per cent, after opening 144 points lower. The Sensex closed at 77,708, shedding 443 points. ICICI Bank beat estimates by 12 per cent and gained nearly 3 per cent. Axis Bank posted a profit beat but fell sharply. HDFC Bank came in broadly in line, but its net interest margin slipped to a record low amid deposit competition, which was enough for the market to sell it. The private bank index fell 2.3 per cent. The broader read is that the Street had spent two weeks buying ahead of results. Once the numbers confirmed what was already priced in, sellers arrived.“...Renewed geopolitical tensions in the Middle East pushed Brent crude prices above the $90 per barrel mark, reviving concerns over inflation,” said Ajit Mishra, SVP-Research, Religare Broking. “...Rotational buying across sectors and the resilience of the broader markets continue to offer ample stock-specific trading opportunities.”PSU banks, pharma stocks outperform amid broader weaknessPSU banks told a different story. Punjab National Bank reported strong quarterly numbers, and the Nifty PSU Bank index surged 2.75 per cent, leading all sectoral gainers. Most PSU banks are yet to report, and anticipation continues to build. The sector’s reaction to the day’s results will be a key watch.Pharma and healthcare also outperformed, continuing a defensive rotation that has become a recurring feature of this results season. Trent and PowerGrid were the top Nifty gainers. Axis Bank and HDFC Bank were the biggest drags. Broader markets held up better than the headline indices, Nifty Midcap 100 gained 0.60 per cent, and Smallcap 100 rose 0.16 per cent, with the BSE advance-decline ratio at 1.10.Oil, rupee and gold remain in focusOn the macro side, US military strikes on Iran entered a ninth consecutive day, pushing Brent crude to touch $90 a barrel, with shipping near the Strait of Hormuz under strain. WTI crude hovered near $81 per barrel, and domestic crude futures traded around ₹7,900. The rupee weakened 16 paise to close at 96.44 against the dollar, with RBI intervention believed to have capped further downside. Technically, support sits near 95.80 with resistance at 96.50. CareEdge Ratings, however, expects the rupee to average 93–94 per dollar in FY27, projecting India’s balance of payments to turn positive after two consecutive years of deficit, supported by an expected doubling of net FDI from $7 billion in FY26 to $15 billion in FY27, and a recovery in FPI flows after the $16 billion outflow recorded last fiscal.“After ending FY26 on a sombre note, India’s capital account seems to be turning a corner,” said Rajani Sinha, Chief Economist, CareEdge Ratings. “...Recent policy measures by the government and the RBI should help attract sizeable inflows of USD 45–60 billion from FCNR(B), ECBs and OFCBs.”Gold edged higher. MCX Gold rose around ₹900 to ₹1,41,850, while COMEX Gold rebounded to around $4,020 from support near $3,975, aided by softer US June inflation data. Expectations of a potential Fed rate hike later this year and a firm dollar continue to cap upside. MCX Gold has immediate support at ₹1,40,000 and resistance near ₹1,42,500.Investors await auto earnings and Fed decisionThe government’s clarification in Parliament that there is no proposal to remove the long-term capital gains tax on equities provided some relief during the session. UltraTech Cement reported a healthy Q1FY27 with strong year-on-year revenue and profit growth, though sequential profitability dipped due to the monsoon quarter.Looking ahead, Bajaj Auto and TVS Motor report tomorrow. Auto has been among the market’s strongest performing sectors this year, and any miss on guidance will likely be felt quickly. SBI Funds Management and Alpine Texworld are set to list on July 21. The US Federal Reserve’s rate decision on July 29 remains the key global trigger, with the rupee expected to stay under a weak bias until then.Published on July 20, 2026
