Indian shares erased early gains to end little changed on Monday, weighed down by losses in ICICI Bank after Reuters reported its exposure to a troubled oil trader, while sentiment was hurt by rising coronavirus cases in the country.
The Nifty closed 0.05% lower at 9,261.85, while the Sensex ended up 0.19% at 31,648. The indexes had risen as much as 1.3% and 1.5%, respectively, earlier in the session.
ICICI Bank Ltd was the biggest drag on the indexes, falling 3.8%, after Reuters reported that the bank had about $100 million exposure to troubled oil trader Hin Leong.
Larger peer HDFC Bank Ltd, however, led gains with a 3.8% jump after the private-sector lender reported an 18% rise in quarterly profit and said it had shortlisted candidates for the position of chief executive officer.
But investor sentiment remained weak as the number of coronavirus cases in the country rose to 17,264, including 543 deaths, as of Monday morning. India had extended the world's biggest lockdown until early May in an effort to contain the spread of the virus.
The Nifty 50 has "underperformed the global markets despite having much lower cases of COVID-19 vis-à-vis other markets ... this underperformance can be explained by the relatively smaller magnitude of fiscal package for India," analysts at Motilal Oswal Financial Services Ltd said in a note.
"We expect market volatility to remain elevated and near-term market direction to be a function of policy response, global market developments, spread and duration of the virus, and indeed corporate commentaries around the short/medium-term impact of the lockdown."
Airline stocks took a beating after the government said no clearance had been given to begin booking tickets for journeys from 4 May, a day after the lockdown is due to end.
InterGlobe Aviation Ltd slid 6%, while SpiceJet Ltd fell 1.7%.