Indian equity benchmarks traded lower in early trade on Monday, with the Sensex and Nifty declining amid broad-based weakness in banking stocks following the announcement of June quarter earnings by major private sector lenders.

At around 9:30 a.m., the BSE Sensex was down 575.67 points, or 0.74 percent, at 77,575.78, while the NSE Nifty 50 declined 152 points, or 0.62 percent, to 24,182.30.

Banking stocks emerged as the biggest drag on the market after several lenders reported their quarterly results. The Bank Nifty index slipped nearly 2 percent as investors reacted to mixed earnings and margin concerns. HDFC Bank shares declined around 5 percent after its quarterly results showed a sharper-than-expected contraction in net interest margins despite steady loan growth and stable asset quality. Axis Bank shares also fell nearly 5 percent following its earnings announcement, while Kotak Mahindra Bank and Yes Bank declined around 3 percent each.

Market sentiment was further impacted by a sharp rise in global crude oil prices. Brent crude futures climbed about 2.5 percent to trade above 90 dollars per barrel, reaching their highest level in more than a month. The increase followed escalating geopolitical tensions in West Asia, with continued military conflict involving the United States and Iran raising concerns over potential disruptions to oil shipments through the Strait of Hormuz. Higher crude oil prices remain a key risk for India, which imports a significant portion of its energy requirements.

Adding to investor caution, India's volatility index, India VIX, rose more than 3 percent to 13.57, indicating increased expectations of near-term market fluctuations.

The combination of weak banking stocks, elevated crude oil prices, and rising market volatility weighed on investor sentiment, leading to broad-based selling across the benchmark indices.