Sensex sheds 500 points

In line with its Asian counterparts, Indian stock markets opened lower. However, the shares of RIL, which decreased by 4% in early morning trade, further contributed to the decline in the indices. Despite a 46 percent increase in net profit to Rs. 17,955 crore in the June quarter, the oil to telecom major fell short of analysts' expectations. Sensex dropped 500 points to begin trading at 55,656, and Nifty 50 dropped 150 points to begin trading at 16,607.

This is a reversal of the trend from the previous week, which had been boosted by encouraging corporate earnings reports. According to Apurva Sheth, head of market perspectives at Samco Securities, the Nifty50 index ended last week with the highest gain in the previous 75 weeks.

Foreign portfolio investors, or FPIs, who turned net buyers in July for the first time in nine months as their selling intensity decreased, deserve some of the credit as well.

However, a few corporate earnings reported after the markets closed and over the weekend disappointed analysts.

"RIL's results, though impressive on the telecom and retail front, fell slightly below expectations in the refining space. ICICI Bank's results are the best in the banking segment," V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services told PTI.