Bank and IT stocks drag Sensex, Nifty; worst weekly loss in six months

Business Standard

5 days ago

Domestic equities fell over half a per cent on Friday, weighed down by declines in banking and IT stocks after they missed their earnings estimates.
The losses capped a third straight weekly loss for the benchmark indices, marking their longest weekly losing streak in six months.
The Sensex ended the session at 81,758, down by 502 points, or 0.6 per cent, while the Nifty 50 index closed at 24,968, with a drop of 143 points, or 0.6 per cent.
Private banks contributed the most to the declines. Top-weight HDFC Bank, which declined by 1.5 per cent, was the biggest contributor to the Sensex decline, followed by Axis Bank, which fell 5.2 per cent. Axis Bank was also the worst-performing Sensex and Nifty stock. The private lender's stock took a beating after it reported weak earnings, driven by significantly higher slippages.
The bank reported a 4 per cent year-on-year (YoY) decline in net profit to Rs 5,806 crore for the April–June quarter of FY26 (Q1FY26). The bank's loan and deposit growth were muted in the June quarter, raising concerns about its growth prospects.
"The early trend in Q1 results has been muted, with management commentary reflecting caution amid global uncertainty, which is weighing on market sentiment. Additionally, the prolonged wait for the India–US trade deal, ahead of the looming August 1 tariff deadline, is keeping investors on the sidelines," said Siddhartha Khemka, head of research, wealth management, Motilal Oswal Financial Services.
Khemka added that going forward, the banking sector would continue to be in focus with Q1 results from heavyweights HDFC Bank and ICICI Bank, scheduled for release over the weekend.
"Overall, we expect the market to remain in consolidation mode amid continued global trade uncertainty and a subdued start to the Q1FY26 earnings season," said Khemka.
Going forward, the earnings season and the progress of the trade deal with the US will determine the market trajectory.
"Markets will react to the earnings of the three heavyweights—Reliance, HDFC Bank, and ICICI Bank—in early trade on Monday, which will likely set the tone for the session. On the index front, a decisive break below 24,900 in Nifty could lead to further pressure, while any rebound may face resistance near the 20-day EMA zone around 25,200," said Ajit Mishra, SVP-Research at Religare Broking.
The market breadth was weak, with 2,440 stocks declining and 1,622 advancing. Foreign portfolio investors were net buyers worth Rs 375 crore, and domestic institutions bought shares worth Rs 2,103 crore.