Indian Markets Slide as FII Selling and Crude Oil Concerns Dominate Trade

Indian equity markets witnessed a sharp reversal on Monday as selling in private banking and information technology stocks, elevated crude oil prices and weak global cues erased part of the recovery recorded during the previous week. The BSE Sensex plunged 876.37 points, or 1.17%, to close at 73,852.90, while the NSE Nifty 50 declined 257.20 points, or 1.11%, to settle at 22,888.95, slipping below the psychologically important 22,900 mark.

The decline followed two consecutive sessions of gains and came after the benchmark indices recorded their strongest weekly performances in approximately six months. The Nifty had climbed from 22,421.95 on October 2 to 23,146.15 on October 16, gaining around 2.77% during the previous week. However, Monday's reversal exposed the fragility of the recovery, with the Nifty Midcap 100 falling 1.09% and the Nifty Smallcap 100 declining 1.01%.

Foreign institutional investor (FII) selling remained a major concern. FPIs reportedly withdrew approximately ₹52,100 crore from Indian equities during October so far. On Monday, foreign investors sold shares worth around ₹1,148.64 crore, while domestic institutional investors purchased approximately ₹3,201.19 crore, cushioning the broader decline. A sustained reduction in overseas withdrawals will be important for any recovery.

Crude oil prices remained elevated despite easing during the session. Brent crude traded around $107–109 per barrel after touching approximately $110 on October 16. Higher oil prices threaten India's import bill, inflation outlook and corporate margins, particularly in aviation, paints and chemicals. Recent RBI measures to support the rupee helped the currency strengthen around 2% during the previous week, closing at ₹94.96 per US dollar on October 16.

Private banks led the decline. Axis Bank fell approximately 4.2% despite reporting a 39.4% increase in consolidated second-quarter net profit to ₹7,704.67 crore. HDFC Bank declined around 2.3% as its earnings failed to satisfy investors. Infosys, Bajaj Finance, UltraTech Cement and Trent were among the other major laggards.

In contrast, Punjab National Bank surged approximately 8% after reporting better-than-expected quarterly results. Its standalone net profit increased 12.8% year on year to ₹5,532 crore, while the Nifty PSU Bank index gained around 2.5%. Tata Consultancy Services and Tech Mahindra had also supported the previous week's technology-led rally, although IT stocks faced renewed selling on Monday.

Gold remained firm amid uncertainty. Published Hyderabad rates varied, with 24-carat gold quoted between approximately ₹1,42,120 and ₹1,45,910 per 10 grams. MCX gold reached around ₹1,48,356 during morning trading.

The Nifty's immediate support is around 22,800, while 23,000–23,200 remains a recovery hurdle. Investors will monitor institutional flows, crude oil, corporate earnings and upcoming PMI data as trading resumes on Wednesday following the Dussehra holiday.