Market trade lower; PSU Bank shares tumble

The key equity benchmarks traded with significant losses in mid- morning trade on Monday weighed down by weakness in banking shares after the Reserve Bank of India tightened Cash Reserve Ratio (CRR) maintenance norms for banks. Investor sentiment also remained subdued ahead of India's inflation data, due later in the day. Despite a recent decline, crude oil prices remained elevated, keeping inflationary concerns in focus. The Nifty slipped below the 22,500 mark.

Market participants tracked movements in the rupee and crude oil prices, along with quarterly earnings announcements released over the weekend. Mixed global cues, sustained foreign institutional selling and ongoing geopolitical uncertainties added to the cautious undertone. Investors also remained focused on the September-quarter earnings season for fresh cues on corporate performance and the broader market outlook.

PSU Bank shares declined after advancing in the past trading session.

At 11:25 IST, the barometer index, the S&P BSE Sensex declined 494.21 points or 0.68% to 71,977.60. The Nifty 50 index dropped 121.45 points or 0.55% to 22,396.

The broader market outperformed the frontline indices. The BSE 150 MidCap Index added 0.29% and the BSE 250 SmallCap Index jumped 0.99%.

The market breadth was positive. On the BSE, 2,301 shares rose and 1,797 shares fell. A total of 303 shares were unchanged.

Economy:

The Reserve Bank of India (RBI) has announced a special facility to meet the entire daily US dollar requirements of three public sector oil marketing companies ? Indian Oil Corporation (IOCL), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL). According to an RBI press release, the central bank will sell US dollars to the three companies through designated banks to meet their foreign exchange requirements. The facility will come into effect tomorrow and remain operational until further notice. The RBI said, the decision was taken following an assessment of prevailing market conditions and is aimed at facilitating the foreign exchange requirements of the three state-owned oil marketing companies.

The Reserve Bank of India (RBI) has raised the minimum daily Cash Reserve Ratio (CRR) maintenance requirement for scheduled banks to 99% from 90%, effective from the reporting fortnight beginning October 16, 2026. Under the existing framework, banks are required to maintain at least 90% of the prescribed CRR on a daily basis, provided their average daily balance over the reporting fortnight meets the CRR requirement stipulated by the RBI.

Buzzing Index:

The Nifty PSU Bank index declined 1.39% to 8,031. The index climbed 1.63% in the past trading sessions.

State Bank of India (down 1.64%), Punjab National Bank (down 1.32%), Union Bank of India (down 1.23%), Canara Bank (down 0.78%), Bank of India (down 0.75%), Indian Bank (down 0.74%), Bank of Baroda (down 0.68%), Indian Overseas Bank (down 0.46%), Punjab & Sind Bank (down 0.33%) and UCO Bank (down 0.13%) declined.

Global Market:

US stock futures pointed to a positive opening on Monday, with Dow futures rising 190 points. However, investors remained cautious ahead of key US inflation data and the start of the September-quarter earnings season.

Asian indices traded mixed on Monday amid geopolitical uncertainty and caution ahead of corporate earnings. Japan's cash equity market remained closed for Sports Day.

US stocks ended higher on Friday, with all three major indices advancing and posting weekly gains. The Dow Jones Industrial Average rose 423.31 points, or 0.83%, to 51,654.95. The S&P 500 gained 46.18 points, or 0.59%, to 7,811.54, while the Nasdaq Composite advanced 172.83 points, or 0.64%, to 27,366.17.

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