Banking stocks came under selling pressure on Wednesday morning, dragging the Bank Nifty index lower by about 1%, as heavyweights such as Axis Bank, ICICI Bank and HDFC Bank declined, weighing on the benchmark Nifty 50.
At around 10:40 am, the Nifty Bank index was down about 1% at 56,383. The weakness in financial stocks also pulled the broader market lower, with the Sensex falling 640 points, or 0.8%, to 77,563, while the Nifty slipped 176 points to 24,086.
Among the biggest laggards in the banking pack, Axis Bank fell more than 2%, emerging as the top loser on the Nifty50. Other major private lenders also traded lower. HDFC Bank and ICICI Bank each declined around 1.3%, placing them among the key drags on the index.
Broader banking pack trades lower
Selling pressure was visible across the broader banking space. Kotak Mahindra Bank slipped over 1%, while Union Bank of India declined more than 1% in early trade.
Several other lenders also traded modestly lower, including Yes Bank, IndusInd Bank, Federal Bank and State Bank of India, which slipped between 0.4% and 0.7%.
Public sector lenders such as Bank of Baroda, Punjab National Bank and Canara Bank also edged lower, though their losses remained relatively limited compared to private banking peers.
Only a few stocks in the index managed to stay in the green. AU Small Finance Bank rose about 0.5%, while IDFC First Bank traded marginally higher.
Sectoral indices reflect weakness
The pressure on banking stocks was also visible in sectoral indices. The Nifty Private Bank index declined around 1.35%, while the Nifty PSU Bank index slipped about 0.4% during the session.
Technical view: consolidation after rebound
Analysts said the banking index may be witnessing a phase of consolidation after Tuesday’s rebound.
According to Aakash Shah, Technical Research Analyst at Choice Equity Broking, the Bank Nifty had shown relative strength in the previous session, closing near 56,950.
He said immediate support lies around the 56,600–56,700 zone, while resistance is placed near 57,200–57,300. A sustained breakout above this resistance band could strengthen sentiment in banking stocks, which remain key drivers of the broader market.
Institutional flows and global cues in focus
Institutional flows continue to play a crucial role in market direction. Recent data shows foreign institutional investors (FIIs) remained net sellers of around Rs 4,673 crore, while domestic institutional investors (DIIs) provided support with net buying of about Rs 6,333 crore, helping limit deeper market declines.
Market participants are also closely tracking global developments, particularly the ongoing geopolitical tensions in the Middle East, which continue to influence investor sentiment through volatility in energy markets and potential disruptions to global shipping routes.
Oil supply risks add to uncertainty
According to Ponmudi R, CEO of Enrich Money, the crisis in West Asia has raised concerns about possible disruptions to crude oil supply chains, especially around the Strait of Hormuz, a critical maritime corridor that handles nearly 20% of global oil trade.
Since India imports nearly 85% of its crude oil requirements, any disruption to global energy supply routes could trigger volatility in oil prices and inflation expectations, potentially affecting equity market sentiment and sectors such as banking.