The Sensex crashed 876.37 points to close at 73,852.90 on Monday, and the Nifty fell 257.20 points to 22,888.95, as private bank stocks sank on shrinking profit margins. The two-day rally is over — and investors can’t do anything about it today, because markets are closed for Dussehra and reopen on Wednesday.
Updated: October 20, 2026, 10:00 IST
Quick Read
- The 30-share BSE Sensex tumbled 876.37 points (1.17%) to settle at 73,852.90; the 50-share NSE Nifty dropped 257.20 points (1.11%) to 22,888.95. During the day, the Sensex fell as much as 1,020.73 points, PTI reported.
- Axis Bank crashed 4.2% on the Nifty 50 and HDFC Bank fell over 2% after September-quarter earnings disappointed investors. Axis’s net interest margin shrank 37 basis points to 3.36% — even though its profit jumped 39.4% to Rs 7,704.67 crore. PSU banks were the day’s only winners: the Nifty PSU Bank index rose 2.41%.
- FIIs sold Rs 1,148.64 crore worth of Indian shares on a net basis (provisional exchange data), while domestic investors bought Rs 3,201 crore. Nearly Rs 5 lakh crore of investor wealth was wiped out, the Free Press Journal reported. Brent crude traded near $108.50 a barrel.
Monday was a rough day for Dalal Street. Benchmark indices ended sharply lower after two days of a rally, dragged by private lenders HDFC Bank and Axis Bank and weak global trends, PTI reported. Out of 3,664 stocks traded on the NSE, 2,717 declined and only 846 advanced, ET Now reported.
Why private banks sank
The trigger was the September-quarter earnings of the big private banks — and one number in particular: the net interest margin. NIM is simply the difference between what a bank earns on loans and what it pays on deposits, expressed as a percentage. When it shrinks, the bank earns less on every rupee it lends.
ET Now reported the damage: HDFC Bank’s NIM fell 14 basis points to 3.16%, ICICI Bank’s fell 12 basis points to 4.18%, and Axis Bank’s fell 37 basis points to 3.36%. The overall Nifty Private Bank index fell 2%.
Axis Bank was the biggest loser in the Nifty 50, crashing 4.2% — even though it reported a 39.4% rise in consolidated net profit to Rs 7,704.67 crore in Q2 FY27. The market didn’t care about the profit. It cared about the margin squeeze.
“Private banks remained under pressure following quarterly earnings and concerns over margin trends,” Vinod Nair, Head of Research at Geojit Investments, told PTI.
> Also read: 74,849: Sensex gains before Dussehra market holiday
Everyone else fell too — except PSU banks
It wasn’t just banks. UltraTech Cement, Infosys, Bajaj Finance, Trent and NTPC were among the major laggards. The Nifty IT index declined 1.56% and Nifty FMCG fell 1.40%. India VIX — the market’s fear gauge — jumped more than 6% intraday. The broader market bled too: the BSE MidCap Select index dropped 0.97% and the SmallCap Select index fell 0.53%.
One corner of the market went the other way. PSU banks bucked the broader weakness, supported by expectations of relatively resilient margins and asset quality, Nair said. The Nifty PSU Bank index was the only major sectoral index to finish in the green, rising 2.41%, per ANI. State Bank of India, Adani Ports, Larsen & Toubro and Maruti Suzuki were among the day’s gainers.
What FIIs and DIIs did
Foreign institutional investors sold more Indian shares than they bought on Monday. Provisional exchange data put net FII selling at Rs 1,148.64 crore — they bought shares worth Rs 11,240.64 crore and sold Rs 12,389.28 crore, CNBC-TV18 reported.
Domestic institutional investors stepped in on the other side, buying Rs 3,201 crore worth of shares, CNBC-TV18 reported.
Zoom out and the foreign-exit picture is stark. In October so far, FIIs have been net sellers of about Rs 52,100 crore — the third-biggest monthly outflow of 2026, ET Now reported. Over the last 10 months, net FII outflows from Indian markets have crossed Rs 3,12,402 crore. The Economic Times noted that FIIs have withdrawn nearly $63.6 billion from Indian equities since October 2024, wiping out almost all the net investments they made over the previous nine years.
> Also read: ₹1,47,430/10g: gold rate today Oct 17 — 20 days to Dhanteras
Markets closed today — what next
Indian stock markets are closed today, October 20, for Dussehra. Trading resumes on Wednesday, October 21, the Free Press Journal reported.
When trading restarts, investors will be watching three things: more Q2 earnings (Bajaj Finance, Hindustan Zinc and UltraTech Cement reported on Monday), Brent crude — which traded near $108.50 a barrel on Monday, keeping imported-inflation worries alive — and whether the private-bank margin squeeze spreads to the next round of results.
One asset moved the other way on Monday. Gold futures rose Rs 436 to Rs 1,48,354 per 10 grams as speculators created fresh positions on firm spot demand, PTI reported. Dhanteras is on November 6 — 17 days away.
> Also read: US-India trade deal stuck: what’s the last 1% problem?
FAQ
### Why did the Sensex fall 876 points on Monday?
Heavy selling in private banking stocks — mainly Axis Bank (-4.2%) and HDFC Bank (-2%+) — after September-quarter earnings disappointed on net interest margins, plus weak global trends. The Sensex fell 876.37 points to 73,852.90 and the Nifty dropped 257.20 points to 22,888.95, PTI reported.
### Why did Axis Bank fall even though its profit rose 39.4%?
Because investors focused on its shrinking net interest margin, which fell 37 basis points to 3.36%. Profit is backward-looking; margins tell the market what the next few quarters will look like. HDFC Bank (-14 bps) and ICICI Bank (-12 bps) faced the same worry.
### Are the stock markets open today, October 20?
No. Markets are closed today for Dussehra. Trading resumes on Wednesday, October 21.
Wednesday’s session will show whether Monday’s fall was a one-day margin scare or the start of a deeper earnings-season correction.
