Markets End Lower For Second Day; HDFC Bank, IT Stocks Drag Benchmarks

Indian benchmark indices ended lower for the second straight session on Tuesday as losses in heavyweight stocks, including HDFC Bank, TCS and Reliance Industries, outweighed gains in the broader market amid elevated crude oil prices and persistent geopolitical tensions in the Middle East.

The Sensex declined 238.41 points, or 0.31%, to close at 77,470.11, while the Nifty 50 fell 50.80 points, or 0.21%, to settle at 24,187.70, slipping below the 24,200 mark.

Market breadth remained positive, with 2,087 stocks advancing, 1,942 declining and 180 remaining unchanged.

Among the top laggards on the Nifty were HDFC Bank, TCS, Reliance Industries, SBI and Dr Reddy's Laboratories, while Shriram Finance, Bajaj Finserv, HCL Technologies, Eicher Motors and UltraTech Cement were among the leading gainers.

The broader market continued to outperform the benchmark indices, with the Nifty Midcap index rising 0.3% and the Nifty Smallcap index gaining 0.5%.

Sectoral performance remained mixed. Nifty FMCG, IT, Oil & Gas and PSU Bank indices declined between 0.3% and 0.8%, while Auto, Metal and Realty stocks gained 0.6% to 1%.

HDFC Bank, Crude Prices Weigh On Sentiment

Investor sentiment remained under pressure as Brent crude hovered around $90 a barrel, with markets balancing reports of US-Iran mediation efforts against fresh attacks in the region and threats by Yemen's Houthi rebels to blockade Saudi Arabia.

Higher crude prices remain a key concern for India, the world's third-largest oil importer, as they could fuel inflation, widen the trade deficit and squeeze corporate margins.

The benchmark indices also remained under pressure from HDFC Bank, which fell another 2% after plunging 5.1% on Monday following weaker-than-expected June-quarter margins.

Reuters also reported, citing sources, that the lender is awaiting an additional review by independent directors before recommending CEO Sashidhar Jagdishan's reappointment to the Reserve Bank of India, adding to investor caution.

Foreign portfolio investors (FPIs) remained net sellers, offloading Indian equities worth ₹1,121 crore on Monday, according to provisional NSE data. Domestic institutional investors (DIIs), however, provided support by purchasing shares worth ₹1,312 crore.

The Indian rupee strengthened 21 paise to close at 96.24 against the US dollar, compared with its previous close of 96.45.

Vinod Nair, Head of Research at Geojit Investments, said mid-cap stocks continue to outperform despite geopolitical challenges, supported by expectations of healthy corporate earnings and demand-driven business updates.

He noted that while elevated valuations in the mid-cap segment warrant caution compared with large-cap stocks, underlying business conditions are expected to remain favourable through the first half of FY27. However, he cautioned that sustaining this momentum will depend on a moderation in rising input costs, as demand growth could flatten in the second half of FY27. Nair added that the broader market is currently trading in a mixed range, with large-cap stocks underperforming amid moderating inflows, rising geopolitical risks and elevated crude oil prices.