Going ahead, investors will closely monitor further developments in the US-Iran conflict, movements in crude oil prices, the ongoing Q1 earnings season, corporate business updates, and the progress of the southwest monsoon for cues on the market's near-term direction.

PSU bank shares declined after advancing in the past three consecutive trading sessions.

At 14:30 ST, the barometer index, the S&P BSE Sensex jumped 536.03 points or 0.69% to 77,080.37. The Nifty 50 index tumbled 165.90 points or 0.68% to 24,044.65.

In the broader market, the BSE 150 MidCap Index fell 0.64% and the BSE 250 SmallCap Index dropped 1.07%.

The market breadth was weak. On the BSE, 1,435 shares rose and 2,736 shares fell. A total of 191 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, rallied 3.36% to 13.73.

In the commodities market, Brent crude for September 2026 settlement $3.08 or 3.70% to $86.38 a barrel.

Economy:

India's retail inflation breached the Reserve Bank's target for the first time in 17 months, government data showed on Monday, setting the stage for interest rate hikes in an economy at risk from a prolonged West Asia conflict.

The consumer price index rose to 4.38% year-over-year in June, up from 3.93% figure that was recorded in May. Inflation was led by higher fuel and food costs, which rose amid Iran war-driven supply disruptions and a delay in seasonal rains.

The year-on-year inflation rate based on the All India Consumer Food Price Index (CFPI) for the month of June was 5.32%, India's Ministry of Statistics and Program Implementation said in a Monday release. Transport inflation rose 4.3% in June, quicker than the 1.75% rise in May.

India's wholesale price index (WPI)-based inflation rose to 9.87% in June 2026 from 9.68% in May 2026. According to the Ministry of Commerce and Industry, the increase in wholesale inflation was primarily driven by higher prices of food articles, mineral oils (including petroleum products), basic metals, and chemicals and chemical products.

The June 2026 wholesale inflation figures are based on the revised WPI series, with 2022-23 as the base year. The revised series, introduced by the government last month, aims to provide a more accurate representation of the current economic structure.

Buzzing Index:

The Nifty PSU Bank index dropped 1.80% to 8,308.70. The index rallied 4.81% in the past three consecutive trading sessions.

Bank of Maharashtra (down 3.26%), Canara Bank (down 2.89%), Bank of India (down 2.33%), State Bank of India (down 1.87%), Bank of Baroda (down 1.82%), Indian Bank (down 1.67%), Punjab National Bank (down 1.39%), Indian Overseas Bank (down 1.35%), Punjab & Sind Bank (down 1.28%) and UCO Bank (down 1.25%) declined.

Numbers to Track:

The yield on India's 10-year benchmark federal paper was up 1.16% to 6.811 as compared with previous close 6.733.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 96.1900 compared with its close of 95.6800 during the previous trading session.

MCX Gold futures for 5 August 2026 settlement added 0.61% to Rs 141,165.

The US Dollar Index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.15% to 100.88.

The United States 10-year bond yield rose 0.22% to 4.620.

Stocks in Spotlight:

PDS surged 8.43% to Rs 390.25 after the company announced that it had secured a multi-year Sourcing as a Service (SaaS) contract with the global sourcing arm of a leading French-headquartered supermarket group.

Plastiblends India jumped 4.36% to Rs 204.50 after the company reported 67.6% rise in net profit to Rs 14.95 crore on an 11% increase in revenue to Rs 221.61 crore in Q1 FY27 as compared with Q1 FY26.

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