Sensex, Nifty erase gains as ICICI leads banks lower
Photo Credit: Reuters

Indian shares wiped out early gains to close lower on Monday, as a selloff in banking stocks soured optimism around the easing of coronavirus-led lockdowns at home and elsewhere, even as automakers clocked robust gains.

The NSE Nifty 50 index ended 0.13% lower at 9,239.20, while the S&P BSE Sensex closed down 0.26% at 31,561.22. The Nifty had climbed 2% earlier on Monday.

European shares and other Asian stocks climbed as investors clung to signs that more countries were restarting their economies and looked past reports of a pick-up in new coronavirus cases.

In India, passenger train travel is set to partially resume from Tuesday, amid a weeks-long lockdown which has put thousands out of jobs and left businesses without revenue. Coronavirus cases in the country crossed 67,000 on Monday.

Shares in ICICI Bank Ltd, one of India's top private-sector lenders, settled 5.2% lower after its March-quarter showed coronavirus-related provisions weighed on profits.

The stock was the top drag on the Nifty 50, followed by HDFC Bank Ltd, Housing Development Finance Corp., and Kotak Mahindra Bank. The Nifty bank index shed 2.1%.

Banking stocks have remained volatile in recent weeks, and the sector is projected to suffer a fresh bout of bad debt as businesses default in the wake of the COVID-19 pandemic.

Auto stocks jumped amid optimism that the easing of lockdowns would lead to a return in demand after a month of zero sales for many companies. The Nifty auto index surged 6.4%, recording its best day since late April.

Four automakers led the list of gainers on the Nifty 50, with Hero Motor and Tata Motors each rising more than 6%.

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