The BSE Sensex closed 58.99 points lower at 77,650.52, while the NSE Nifty50 settled 22.40 points down at 24,216.50, extending losses on Tuesday despite marginal recovery from Monday's steeper decline. According to The Economic Times, the market witnessed continued selling pressure throughout the session, with both benchmark indices closing in negative territory. The decline was driven by a combination of earnings disappointments, global uncertainties, and broader market sentiment concerns, with 107 stocks hitting their 52-week lows and 124 shares reaching 52-week highs on the BSE during the session. Volatility remained subdued with India VIX falling 1.29% to 12.98, indicating reduced market uncertainty despite the overall negative sentiment. However, broader markets bucked the trend with Nifty Midcap 100 and Nifty Smallcap 100 opening with marginal gains, showing resilience in smaller companies. As per Upstox Securities, broader markets were outperforming their larger peers as NIFTY Midcap 100 index advanced 0.2% and NIFTY Smallcap 100 index advanced 0.45%, indicating continued buying interest in smaller companies.
HDFC Bank shares tumbled over 5% following the lender's June quarter earnings announcement, which failed to meet investor expectations despite reporting a 5% year-on-year rise in standalone net profit to ₹19,060 crore for the quarter ended June. As reported by The Times of India, the sharp decline in the banking heavyweight was primarily caused by investor disappointment with its quarterly earnings, specifically a sharper-than-expected decline in net interest margins (NIMs) and a slight miss on net interest income. Banking stocks were among the top losers after Axis Bank, HDFC Bank, Kotak Mahindra Bank reported their Q1 earnings on Saturday, with Axis Bank, Maruti Suzuki, Kotak Bank, Infosys, TCS, M&M and IndiGo leading the losers on Sensex, falling up to 5.48% on Monday. The banking pack remained under pressure after HDFC Bank's results, dragging the broader financial sector lower with Nifty Bank declining 0.98% and Nifty Private Bank index tumbling 2.27%, making it the worst-performing sector of the day. On Tuesday, Bajaj Finserv, Axis Bank, Eternal, HDFC Bank, HCL Technologies, M&M, SBI and Trent shares dropped nearly 1-2% to lead losses on Sensex, while UltraTech Cement, ICICI Bank, Maruti Suzuki, NTPC, IndiGo and ITC shares rose around 1-2% to lead gains.
Despite the overall market decline, broader markets outperformed the frontline indices with Nifty Midcap 100 gaining 0.60% and Nifty Smallcap 100 rising 0.16%, indicating continued buying interest in smaller companies. According to The Economic Times, among sectoral indices, Nifty Financial Services, Nifty PSU Bank, Nifty IT, Nifty Private Bank and few other indices opened in the red with marginal losses, while the overall market breadth remained positive with NSE seeing 1,453 advances and 775 declines, while 147 stocks remained unchanged. UltraTech Cement, ICICI Bank, Maruti Suzuki, NTPC, IndiGo and ITC shares rose around 1-2% to lead gains on the benchmark index. Among Sensex stocks, HDFC Bank dropped over 5%, while Axis Bank declined more than 5% after investor reaction to earnings, with Kotak Mahindra Bank, Maruti Suzuki, Infosys, TCS and Reliance Industries also ending lower. However, Trent surged more than 3% to top the gainers' list, with Power Grid, NTPC, SBI, UltraTech Cement, Bharat Electronics, ICICI Bank, HCLTech and Sun Pharma also posting gains. As per Upstox Securities, broader markets were outperforming their larger peers as NIFTY Midcap 100 index advanced 0.2% and NIFTY Smallcap 100 index advanced 0.45%, showing resilience in smaller companies.
The market decline was partially offset by Iran-US mediation efforts that led to a significant drop in oil prices, providing some relief to market sentiment. According to The Economic Times, Iran had received a proposal from mediators for a 10-day ceasefire in efforts to salvage an interim deal signed on June 17, a senior Iranian official told Reuters. This intended to pave the way for a lasting agreement to end the raging conflict that began on February 28 with US-Israeli attacks on Iran that killed the latter's former supreme leader. Oil prices dipped below $90 per barrel after the reported mediation efforts, with Brent crude futures trading near $88 per barrel and WTI Crude futures at $82 per barrel. As per The Economic Times, VK Vijayakumar from Geojit Investments noted that "the softening of the Brent crude to about $88 level is a positive sign, but the uncertainty is so huge that there an upside risk to crude price," adding that this will weigh on markets. The analyst also highlighted that the FPI selling is not large enough to impact the market, it is easily getting absorbed by DII buying.
From a technical perspective, the Nifty remains in a consolidation-to-corrective phase as long as it trades below the crucial 24,300-24,400 resistance zone, which also coincides with its 200-day EMA, according to Axis Direct. Rajesh Palviya, Head of Research at Axis Direct noted that the Immediate support for the benchmark index is placed at 24,100, and a breach of this level could accelerate the decline towards the psychologically important 24,000 mark. On the upside, a decisive move above 24,400 would improve near-term momentum and pave the way for 24,500-24,600. Going forward, the trajectory of crude oil prices, banking sector earnings and geopolitical developments are likely to dictate market direction, according to Palviya. He added that any moderation in oil prices or easing of regional tensions could provide the much-needed catalyst for a recovery in sentiment, while the significant trend of broader market outperformance may continue in response to Q1 results. The current session's performance shows broader markets outperforming with NIFTY Midcap 100 advancing 0.2% and NIFTY Smallcap 100 rising 0.45%, indicating continued resilience in smaller companies despite frontline index weakness.
