Indian equity benchmarks fell on Monday, with the NSE Nifty 50 slipping below 24,200 and the BSE Sensex losing more than 700 points. A rise in crude oil prices after fresh tensions in the Middle East, weakness across Asian markets and a sharp decline in HDFC Bank and Axis Bank shares after their June-quarter earnings weighed on the indices.
The Nifty 50 fell as much as 0.8% to 24,149.90. The Sensex declined as much as 707 points, or 0.9%, to 77,444.79.
Here are the three factors behind Monday's decline.
Crude Oil Climbs
Crude oil prices moved higher after the conflict in the Middle East intensified.
Brent crude rose nearly 4% to above $91 a barrel, its highest level since mid-June, after military exchanges widened beyond conventional targets.
The rise in oil prices added to concerns over inflation and fuel costs.
Asian Markets Under Pressure
Indian equities also tracked weakness across Asia.
Japan's Nikkei 225 dropped 4.03%, while South Korea's Kospi declined 3.96%.
The Nifty 50 was down 0.48%.
Elsewhere in the region, Hong Kong's Hang Seng rose 2.02%, China's Shanghai Composite gained 0.89% and Australia's S&P/ASX 200 added 0.16%.
HDFC Bank, Axis Bank Drag Indices
HDFC Bank and Axis Bank were the biggest drags on both benchmark indices after they reported their June-quarter standalone earnings on Saturday.
HDFC Bank fell as much as 5.1% to Rs 777.50. Axis Bank declined as much as 6% to Rs 1,249.05.
HDFC Bank (Q1, Standalone YoY)
- Net interest income up 7% to Rs 33,534 crore versus Rs 31,438 crore.
- Other income down 41% to Rs 12,822 crore versus Rs 21,730 crore.
- Operating profit down 21% to Rs 28,168 crore versus Rs 35,734 crore.
- Provisions up 17.2% to Rs 3,060 crore versus Rs 2,610 crore.
- Net profit up 5% to Rs 19,060 crore versus Rs 18,155 crore.
- Gross NPA at 1.17% versus 1.15%. (Up 2 bps QoQ)
- Net NPA at 0.41% versus 0.38%. (Up 3 bps QoQ)
- Net interest margin down 12 bps at 3.26% versus 3.38%.
- Credit cost up 5 bps at 0.4% versus 0.35%.
- Yield on advances down 10 bps at 7.7% versus 7.8%.
- Cost of funds flat at 4.4%.
ALSO READ: HDFC Bank Q1 Review: Brokerages Flag Margin Pressure Despite Steady Loan Growth
Axis Bank (Q1, Standalone YoY)
- Net interest income up 8% to Rs 14,646 crore versus Rs 13,560 crore. (Up 1% QoQ)
- Pre-provision operating profit up 1% to Rs 11,659 crore versus Rs 11,515 crore. (Up 16% QoQ)
- Provisions down 44% to Rs 2,223 crore versus Rs 3,948 crore.
- Provisions down 37% to Rs 2,223 crore versus Rs 3,522 crore. (QoQ)
- Net profit up 23% to Rs 7,114 crore versus Rs 5,806 crore. (Up 1% QoQ)
- Gross NPA at 1.28% versus 1.23%. (Up 5 bps QoQ)
- Net NPA at 0.39% versus 0.37%. (Up 2 bps QoQ)
- Net interest margin down 16 bps at 3.46% versus 3.62%.
- Gross slippage ratio at 1.79% versus 1.63%. (Up 16 bps QoQ)
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