INDIA STOCKS-Indian shares slip as private-bank earnings, elevated crude hit sentiment

By Vivek Kumar M and Bharath Rajeswaran

Oct 19 (Reuters) - Indian shares inched lower in early Monday trade as investors digested quarterly earnings from key banks over the weekend, while elevated crude prices weighed on sentiment.

The benchmark Nifty 50 .NSEI fell 0.38% to 23,057.6, while the BSE Sensex .BSESN declined 0.39% to 74,434.53, as of 10:05 a.m. IST.

Private sector banks .NIFPVTBNK dropped 1.7%, with HDFC Bank HDBK.NS and Axis Bank AXBK.NS losing 2% and 4.1%, respectively, after missing profit views for the July-September quarter.

Weaker treasury income and higher provisions for bad loans weighed on HDFC Bank, while Axis Bank reported higher operating expenses and weaker other income. Net interest margins dropped at both.

On the other hand, public sector banks .NIFTYPSU rose 2.2%, led by Punjab National Bank's PNBK.NS 5.4% surge after it reported expansion in net interest margin.

"Investors clearly seem to be preferring PSU bank stocks after quarterly results as strong FCNR deposits are weighing on net interest margins of private banks," said Anita Gandhi, head of institutional business at Arihant Capital Markets.

Ten of the 16 major sectors traded higher.

The broader small-caps .NIFSMCP100 and mid-caps .NIFMDCP100 shed 0.5% and 0.2%, respectively, as Brent remained elevated at roughly $108 a barrel.

Although US President Donald Trump waived sanctions and tariffs on Russia, a move that could increase Russian fuel exports and ease supply concerns, persistent Middle East tensions continued to support prices. O/R

"Crude continues to remain a bigger challenge for the market. Any consistent positive move will only come when oil prices cool off," said Pankaj Pandey, head of retail research at ICICI Securities.

Analysts also see near-term liquidity impact for the market as India's largest-ever initial public offering from Mukesh Ambani's Jio Platforms will open for subscription this week.

Among other stocks, online home services provider Urban Company URBN.NS fell 7.4% after its quarterly losses widened.