Indian equity markets tumbled in early trade on Monday, with the Sensex falling as much as 706 points, or 0.90 per cent, to an intraday low of 77,444.79, while the Nifty 50 slid 184 points, or 0.76 per cent, to a low of 24,149.90, as HDFC Bank's disappointing margins and a fresh spike in crude oil prices rattled investor sentiment.
The sell-off came after HDFC Bank shares dropped as much as 5 per cent, their steepest intraday fall in four months, after the lender's June-quarter profit, though in line with estimates, was overshadowed by a sharper-than-expected decline in net interest margins.
Axis Bank, Kotak Mahindra Bank and other private lenders also came under pressure after multiple brokerages flagged softer first-quarter margins across the sector.
Adding to the gloom, Brent crude surged past $90 a barrel after United States forces struck Iran for a ninth consecutive day, reviving fears about India's exposure to an energy price shock given its heavy reliance on imported oil.
Not every stock felt the pain, however. Reliance Industries and ICICI Bank bucked the trend, rising after both companies posted stronger-than-expected quarterly results, with Reliance's oil-to-chemicals and telecom businesses driving a record core profit. State-run upstream oil producers ONGC and Oil India also gained, benefiting from higher crude prices that improve their revenue realisations.
The rupee felt the heat too, weakening 12 paise in early trade to 96.42 against the dollar, hurt by the same combination of costlier oil and foreign capital outflows from Indian equities. Foreign institutional investors had already pulled out ₹376.41 crore worth of equities on a net basis on Friday, even as India's forex reserves rose to a record $675.16 billion in the week ended July 10 as per RBI data.
