Sensex Falls 443 Points, Nifty Slips As Banking Stocks, West Asia Tensions Weigh

Indian equity benchmarks ended lower on Monday as weakness in private banking stocks, rising crude oil prices and escalating geopolitical tensions in the Middle East weighed on investor sentiment.

The Sensex fell 442.93 points, or 0.57%, to close at 77,708.52, while the Nifty 50 declined 95.80 points, or 0.39%, to settle at 24,238.50.

Among the biggest drags on the Nifty were Axis Bank, HDFC Bank, Maruti Suzuki, Kotak Mahindra Bank and Jio Financial Services, while Trent, Cipla, Power Grid Corporation, Bharti Airtel and JSW Steel emerged as the top gainers.

Private Banks Drag, Broader Market Outperforms

Sectoral performance remained mixed, with Nifty Private Bank falling 2.2%, making it the worst-performing index of the day, while Nifty Bank declined 1%.

In contrast, Nifty PSU Bank led sectoral gains with a 2.8% rise. Nifty Pharma gained 1.4%, followed by Nifty Media (1%), Nifty Energy (1%), Nifty Metal (0.86%), Nifty Infrastructure (0.7%), Nifty Consumer Durables (0.72%), Nifty Oil & Gas (0.62%) and Nifty FMCG (0.6%). Nifty Auto and Nifty Realty ended with marginal losses.

The broader market outperformed the benchmark indices, with the Nifty Midcap 100 advancing 0.6%, while the Nifty Smallcap 100 closed marginally higher.

Crude Rally, Geopolitical Risks Pressure Markets

Investor sentiment remained fragile after the conflict between the US and Iran intensified, pushing Brent crude above $91 a barrel during the session, its highest level since mid-June. Higher oil prices renewed concerns over inflation, India's import bill and the potential impact on economic growth.

Global risk appetite was also affected by continued selling in technology stocks as investors questioned whether heavy spending on artificial intelligence would translate into earnings strong enough to justify current valuations.

Demand for safe-haven assets increased, with the US dollar strengthening against major currencies, while rising Treasury yields reflected a cautious global investment environment.

Vinod Nair, Head of Research at Geojit Investments, said the collapse of the June ceasefire between the US and Iran has heightened uncertainty, with crude oil climbing to around $90 a barrel and increasing pressure on the global economy.

He said prolonged geopolitical tensions could keep central banks on a hawkish path during the second half of CY26 as higher inflation and bond yields raise the possibility of further interest rate hikes. Nair added that despite the challenging backdrop, the initial set of June-quarter earnings has been encouraging, led by PSU banks, oil & gas and metal companies. He noted that mid- and small-cap stocks continued to outperform large caps, supported by resilient earnings expectations and improving business momentum, creating opportunities for selective stock picking.