Indian equity markets closed lower on Monday, with the benchmark Nifty 50 index falling 0.39% to 24,238.5 and the BSE Sensex shedding 0.57% to 77,708.52.
The decline was broad-based but particularly acute in the financial sector, where private lenders faced selling pressure following a wave of quarterly earnings reports that highlighted persistent headwinds for net interest margins.
Despite strong loan growth, many lenders reported that rising funding costs and competitive deposit rates are squeezing margins, dampening near-term earnings potential.
The sell-off in private banks reflects growing investor concern over profitability compression in the sector.
Despite strong loan growth, many lenders reported that rising funding costs and competitive deposit rates are squeezing margins, dampening near-term earnings potential.
This follows a period of volatility for Indian equities, which suffered their steepest decline since March earlier in the week, driven by a resurgence of geopolitical tensions in the Middle East.
Geopolitical risks remain a significant overhang for emerging market assets.
Escalating hostilities in the Middle East have kept oil prices elevated and increased uncertainty around global supply chains, prompting investors to adopt a cautious stance.