Sensex, Nifty End Lower As Banking Stocks Drag, Crude Stays Elevated

Indian benchmark indices ended lower on Monday, with the Sensex falling 171.72 points or 0.22% to 77,369.11, while the Nifty 50 declined 32.95 points or 0.14% to settle at 24,219.05.

Market sentiment remained cautious as investors awaited fresh US sanctions on Iran, while elevated crude prices and higher domestic bond yields weighed on risk appetite.

The broader market remained mixed during the session, with the Nifty Midcap 100 rising 0.13%, while the Nifty Smallcap 100 declined 0.26%.

Among sectoral indices, metal and realty stocks were the only major gainers. PSU Bank emerged as the biggest sectoral drag, falling 1.2%, while private bank, media and consumer durables indices declined around 0.4% each.

SBI Life Insurance, Bajaj Finance, Bajaj Finserv, Tata Motors Passenger Vehicles and Max Healthcare were among the biggest Nifty losers.

Hindalco, JSW Steel, Dr Reddy's Laboratories, Tata Steel and HCL Technologies were among the leading gainers.

Crude, Bond Yields Keep Investors Cautious

"Caution dominated market sentiment as investors are awaiting fresh sanctions from the US on Iran later today," said Vinod Nair, Head of Research at Geojit Investments.

Brent crude eased on profit-taking but remained above the $90-per-barrel mark, supported by concerns over tighter Iranian oil supplies and continued tensions around the Strait of Hormuz, Nair said.

He added that the RBI's recent hawkish stance, coupled with elevated crude prices, pushed domestic bond yields higher and dampened risk appetite.

"Tracking weak Asian markets, Indian equities drifted lower through the day, with large caps underperforming broader markets," Nair said.

Metals Outperform, Rupee Slips

Sectorally, metals outperformed on firm commodity prices, while banking stocks came under pressure.

PSU banks lagged their private-sector counterparts amid mark-to-market losses linked to the rise in sovereign bond yields, Nair said.

The Indian rupee also ended marginally lower at 95.74 per dollar on Monday, compared with Friday's close of 95.70.

The day's trading reflected continued caution among investors as markets assessed geopolitical developments, crude oil prices and their potential impact on inflation and domestic financial conditions.