Investor sentiment remained under pressure throughout the week as rising crude oil prices, pressure on private bank net interest margins (NIMs), and continued foreign institutional investor (FII) selling triggered a broad selloff across India’s BFSI sector. Despite several banks reporting higher profits in Q1 FY27, the market focused more on margin compression than earnings growth.
Brent crude oil climbed from nearly $90 per barrel at the beginning of the week to above $100 by Friday, while the rupee weakened further. Benchmark indices declined in every trading session, with the Bank Nifty moving towards the lower end of its 6-week consolidation range.
Private banking stocks remained at the centre of the decline. HDFC Bank reported a 5% year-on-year increase in standalone net profit to Rs 19,060 crore but continued to face selling pressure due to NIM concerns. ICICI Bank stood out with a 15.9% rise in standalone net profit to Rs 14,804.50 crore and an improved standalone NIM of 4.36%. Axis Bank posted a 22.5% increase in standalone net profit to Rs 7,114 crore, while Kotak Mahindra Bank reported a 26% rise to Rs 4,123 crore. Bandhan Bank fell more than 18% after lowering its return on assets guidance to 1.2%-1.4%.
Other financial stocks also witnessed volatility. Jio Financial Services remained under pressure despite reporting a 156% year-on-year jump in Q1 FY27 earnings. Bajaj Finance and Mahindra & Mahindra Financial Services were among the week’s major losers. Shriram Finance, however, reported a 60% increase in standalone profit for Q1 FY27.
In the insurance sector, HDFC Life and ICICI Prudential Life continued to consolidate, while SBI Life Insurance announced a 22% year-on-year rise in net profit after tax. LIC traded lower by the end of the week.
Among fintech firms, Paytm reported a consolidated net profit of Rs 220 crore, up 79% year-on-year, with its highest-ever quarterly EBITDA of Rs 203 crore. However, its stock lost momentum after the results. PB Fintech also remained under pressure amid discussions around proposed SEBI regulations.
Going forward, investors are expected to closely track crude oil prices, developments in West Asia, RBI policy decisions, and management commentary on NIM recovery, deposit repricing, and asset quality.
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