India's equity benchmarks experienced a seventh consecutive day of losses on Monday, September 29, with weakness in private banks contributing significantly to the decline. Both the Nifty 50 and the BSE Sensex edged lower by 0.08%, closing at 24,634.90 and 80,364.94, respectively. This marks the longest daily losing streak in nearly seven months for the indices. Over these seven sessions, the Sensex has dropped 3.19%, and the Nifty has lost 3.10%.
The underperformance of private banks was a key factor in today's market performance. Axis Bank, for instance, fell by 1.9% after Citi Research indicated potential near-term pressure on net interest margins. ICICI Bank also saw a decline, contributing to the overall weakness in the private banking sector.
However, not all sectors experienced losses. Energy and oil and gas indexes gained 0.7% and 1.4%, respectively. Oil marketing companies like BPCL, HPCL, and Indian Oil rose. The broader small-cap segment remained mostly unchanged, while mid-caps saw a rise of about 0.3%.
Market sentiment is cautious as investors await the Reserve Bank of India's (RBI) monetary policy decision, which is due on Wednesday. A Reuters poll indicated that nearly three-quarters of economists expect rates to remain unchanged, although several major banks have suggested the possibility of a rate cut, citing increasing risks to growth. A rate cut could potentially lower borrowing costs, increase consumption, and boost corporate earnings, providing a positive impetus to domestic equities.
Other factors influencing market sentiment include uncertainty surrounding the U.S.-India trade deal and continuous pressure on IT and pharmaceutical stocks. Foreign fund outflows have also contributed to the cautious approach.
In the broader market, the S&P BSE Mid-Cap index added 0.34%, while the S&P BSE Small-Cap index shed 0.17%. On the BSE, the market breadth was weak, with 1,911 shares advancing and 2,281 declining.
The NSE's India VIX, which measures near-term market volatility, eased 0.52% to 11.37.
Data released by the Ministry of Statistics and Programme Implementation on Monday revealed that India's industrial output grew by 4% in August, compared to 4.3% in July. Manufacturing activity saw an annual growth of 3.8% in August.
