India's equity benchmarks fell on July 21, as the country's top private lender, HDFC Bank, extended losses while elevated oil prices weighed on sentiment. The benchmark Nifty 50 ended down 0.21 percent at 24,187.7, and the BSE Sensex shed 0.31 percent to 77,470.11.
HDFC Bank, the heaviest stock on both benchmarks, fell 2.1 percent to a five-week low. The lender had lost 5.1 percent in the previous session after reporting a weaker-than-expected net interest margin for the first quarter.
Dhananjay Sinha, CEO and co-head of institutional equities at Systematix Group, said the banking sector had not delivered the operating improvement expected with more than 18 percent credit growth. "The sector is growing faster but is not earning enough on that growth," Sinha said.
Additional pressure on HDFC Bank came from reports that the lender awaits an independent director review before recommending CEO Sashidhar Jagdishan's reappointment to the Reserve Bank of India.
Brent crude oil hovered around $90 a barrel, adding to caution across markets. Oil prices were elevated by reports of U.S.-Iran mediation efforts against fresh attacks and threats from Houthi forces to blockade Saudi Arabia.
Higher oil prices pose a specific risk for India, the world's third-largest crude importer. Price increases can fuel domestic inflation, widen the nation's trade deficit, and pressure corporate profit margins.
Despite the decline in benchmarks, the broader market showed resilience. Small-cap stocks rose 0.5 percent and mid-cap stocks climbed 0.3 percent. Eight of the 16 major sectors recorded declines.
Among individual movers, cement maker UltraTech rose 1.5 percent after reporting strong quarterly profit. SBI Funds Management gained 6.2 percent on its market debut following a $1.03 billion initial public offering the previous week.
Reliance Industries fell 1.5 percent for the second consecutive session, retreating from a rally that preceded its first-quarter results announcement.
