Indian benchmark indices struggled to sustain their recovery on Monday, October 26, 2026, as weakness in banking and select consumer stocks offset gains in pharmaceuticals, healthcare and metals. Investors also tracked corporate order wins, banking-sector developments and comments from leading financial executives on credit growth, liquidity and retail participation.

Indian Stock Market Today: Sensex and Nifty Struggle to Hold Gains

Indian equity benchmarks traded largely flat on Monday after recovering from their early-session lows, reflecting a cautious mood among investors. The BSE Sensex hovered around the 73,100–73,150 range, while the Nifty 50 traded near 22,600–22,620 during the late-morning session.

At around 12:10 p.m., the Sensex stood at 73,112.98, down 10.85 points, or 0.01 per cent. The Nifty 50 was also largely unchanged at approximately 22,604. Earlier, the indices had shown signs of recovery, but the buying momentum was insufficient to establish a sustained upward move.

The market's performance indicated a tug-of-war between buyers seeking opportunities after the morning decline and investors remaining cautious about banking-sector weakness and the broader economic outlook.

The relative stability in the headline indices also concealed differences in sectoral performance. While pharmaceutical, healthcare and metal stocks attracted buying interest, several banking and consumer-oriented shares remained under pressure.

Broader Markets Outperform Benchmark Indices

Mid-cap and small-cap stocks demonstrated comparatively stronger resilience during the session. The Nifty Midcap 100 gained 0.38 per cent, while the Nifty Smallcap 100 advanced 0.54 per cent, according to the market snapshot reported around 12:10 p.m.

The outperformance suggested that buying interest was not entirely absent from the market, even as large-cap indices struggled to establish a clear direction.

However, a single session of relative strength does not necessarily confirm a sustained recovery in broader equities. Investors will need to assess whether the gains are supported by stronger market breadth, improving volumes and continued participation across sectors.

Broader-market performance will also remain sensitive to corporate earnings, valuation concerns and changes in domestic and foreign institutional investment flows.

Pharma, Healthcare and Metal Stocks Lead Sectoral Gains

Pharmaceutical and healthcare shares emerged as the strongest sectoral performers, with both indices gaining more than 1 per cent during the reported session. Metal stocks also traded higher, adding support to the broader market.

Within the Nifty 50, Dr Reddy's Laboratories, Kotak Mahindra Bank, JSW Steel, BSE and Adani Ports featured among the leading gainers in the reported market snapshot.

On the losing side, Shriram Finance, Tata Consumer Products, HDFC Life Insurance, Asian Paints and Bajaj Finance were among the notable laggards.

The divergence between sectors highlighted the importance of stock-specific developments in determining market performance. Investors continued to distinguish between companies based on earnings expectations, business outlook and near-term growth prospects rather than making broad-based purchases across the market.

Banking Stocks Under Pressure as Nifty Bank Slips

Banking stocks remained a key source of weakness. At around 12:08 p.m., the Nifty Bank index was down 211 points, or 0.39 per cent, at 54,043. Only four of its 14 constituents were trading in positive territory.

Kotak Mahindra Bank was a notable exception, gaining more than 2 per cent and trading around ₹439 in the reported snapshot.

The subdued performance of the banking index came alongside fresh commentary from senior banking executives on the outlook for credit growth, competition from non-banking financial companies and potential merger and acquisition opportunities.

For investors, the central question is whether banks can maintain healthy loan growth without compromising lending standards, profitability or asset quality. Changes in deposit costs, competition for customers and the pace of credit demand will remain important factors for the sector.

Axis Bank CEO Expects Slightly Lower Credit Growth in the Second Half

Amitabh Chaudhry, Managing Director and Chief Executive Officer of Axis Bank, indicated that credit growth could moderate slightly during the second half of the financial year.

His comments offer an important perspective on the lending environment as banks navigate competition, funding requirements and evolving demand across borrower categories.

A moderation in credit growth does not automatically signal a deterioration in the banking sector. Loan growth can fluctuate with seasonal demand, economic activity, borrower financing needs and banks' decisions on underwriting standards.

However, investors will closely monitor whether slower growth affects net interest income and overall profitability. Banks must also balance the pursuit of loan growth against funding costs, liquidity requirements and the need to maintain adequate risk controls.

Chaudhry also said Axis Bank would consider merger and acquisition opportunities if the right transaction emerged for the bank or its subsidiaries. The statement indicates that potential acquisitions remain an option, although any transaction would depend on strategic suitability and the value it could create.

For shareholders, the key considerations in any future deal would include the acquisition price, funding structure, integration risks and its likely effect on earnings and capital requirements.

NBFCs Expand Rapidly, Supporting Credit Availability

Chaudhry also highlighted the rapid expansion of non-banking financial companies, or NBFCs, which he said were growing at approximately 7 per cent year-on-year.

NBFCs have become significant participants in India's financial system, serving customers and business segments where specialised lending models and distribution networks can provide an advantage.

Their ability to raise funds and continue expanding credit can support overall financing activity, even if traditional bank credit growth moderates.

Nevertheless, rapid expansion also requires close monitoring of funding costs, asset quality and liquidity. NBFCs with strong capital positions, diversified funding sources and disciplined underwriting practices may be better equipped to navigate changes in the economic environment.

For investors evaluating financial-services companies, differences in business models and borrower exposure will be crucial. A lender's growth rate should be considered alongside its profitability, borrowing costs and credit-loss trends.

Jyoti Structures Shares Jump 14% on ₹949.35 Crore Power Grid Orders

Shares of Jyoti Structures surged 14 per cent after the company announced two orders from Power Grid Corporation of India, with a combined value of ₹949.35 crore.

The contracts relate to high-voltage direct current (HVDC) transmission-line projects in Rajasthan. The order announcement attracted buying interest as investors assessed the potential contribution of the projects to the company's business pipeline.

Large infrastructure orders can improve revenue visibility and provide opportunities to increase capacity utilisation. For companies operating in the power-transmission and engineering sector, sustained order inflows can be an important indicator of future business activity.

However, the long-term financial benefit depends on project execution, delivery schedules, input costs, working-capital requirements and the company's ability to convert orders into revenue and cash flow.

Investors should therefore examine the contract terms, execution timeline and existing order book rather than treating the announcement alone as evidence of a lasting improvement in financial performance.

Public Sector Banks Mobilise $12.7 Billion Through FCNR(B) Deposits

Public sector banks have mobilised approximately $12.7 billion through Foreign Currency Non-Resident Bank (FCNR(B)) deposits, according to comments reported at the Business Standard BFSI Summit in Mumbai.

Bank executives attributed the inflows to a combination of Reserve Bank of India support through swap arrangements, attractive deposit returns and the ability of banks to leverage the available funding mechanism.

FCNR(B) deposits allow eligible non-resident Indians to maintain deposits in permitted foreign currencies. These deposits can provide banks with access to foreign-currency funding and help diversify their liability base.

The reported mobilisation highlights the importance of funding strategies in a market where banks must balance credit demand against the availability and cost of deposits.

The RBI's role in supporting the mechanism is also relevant to the broader management of foreign-currency liquidity. However, the impact on individual banks will depend on deposit pricing, maturity profiles, currency exposure and the terms of the associated funding arrangements.

Investors should distinguish between the amount of funds raised and the ultimate effect on profitability. The cost of mobilising deposits, currency-related risks and the use of the funds will influence the overall benefit to banks.

Strong SIP Inflows Help Cushion the Market Against Foreign Selling

Vikas Satija, Managing Director and CEO of Shriram Wealth, said strong retail participation had helped make the Indian equity market more resilient amid substantial selling by foreign portfolio investors (FPIs).

He argued that without robust systematic investment plan (SIP) inflows, the market could have experienced a much steeper decline, potentially in the range of 40–50 per cent.

The comment underlines the growing role of domestic investors in absorbing equity supply during periods of foreign outflows. Regular SIP contributions channel money into mutual funds over time and can provide a relatively consistent source of domestic investment demand.

This domestic participation can help reduce the market's dependence on foreign portfolio flows. It does not, however, eliminate volatility or guarantee that share prices will remain supported during periods of economic uncertainty.

Market direction continues to depend on earnings growth, valuations, liquidity, interest-rate expectations and global risk appetite. Retail investors may also change their contribution patterns or redemption behaviour if financial conditions deteriorate.

For long-term investors, the key lesson is to avoid treating domestic inflows as a guarantee against losses. Portfolio diversification, appropriate asset allocation and investment discipline remain essential.

Uday Kotak Highlights India's Entrepreneurial Strength

Veteran banker and Kotak Mahindra Bank founder Uday Kotak highlighted India's startup ecosystem and entrepreneurial potential, while stressing the need for greater support for businesses and economic activity beyond the country's largest commercial centres.

His comments drew attention to the importance of broadening India's economic growth across regions rather than concentrating opportunities in established metropolitan hubs.

A stronger entrepreneurial ecosystem can support employment generation, productivity, innovation and the development of new industries. Smaller cities and emerging business centres can contribute to this process when they have access to capital, infrastructure, skilled workers and reliable digital connectivity.

For the financial sector, wider entrepreneurship can create opportunities in business lending, payments, wealth management and other financial services. The pace at which these opportunities translate into sustainable growth will depend on the quality of business models and the availability of suitable financing.

What Investors Should Monitor Next

With benchmark indices trading close to unchanged levels and sectoral performance remaining mixed, investors will be watching several developments that could influence the next market move.

Banking-sector commentary: Further indications of loan growth, deposit mobilisation and funding costs may affect sentiment towards banks and NBFCs.

Corporate earnings: Company results and management guidance will help investors assess whether current valuations are supported by earnings prospects.

Foreign and domestic investment flows: Continued domestic investment could provide support, but the scale and persistence of foreign selling will remain important for market liquidity.

Infrastructure order activity: New contracts may benefit selected engineering and capital-goods companies, although execution and cash-flow performance will determine the longer-term impact.

Sectoral rotation: The ability of pharmaceutical, healthcare and metal stocks to sustain their gains will help determine whether the broader market can establish a more durable recovery.

Market Outlook

The Indian stock market remained range-bound on Monday, October 26, as the Sensex and Nifty 50 struggled to hold their recovery from the morning lows. Gains in pharmaceutical, healthcare and metal shares provided support, while weakness in banking and selected consumer stocks limited the upside.

The relatively stronger performance of mid-cap and small-cap indices suggests that investors continued to identify opportunities beyond the headline benchmarks. However, the mixed sectoral picture does not yet establish a clear directional trend.

Banking stocks will remain in focus following Axis Bank CEO Amitabh Chaudhry's comments on slightly lower credit growth in the second half and the rapid expansion of NBFCs. Meanwhile, Jyoti Structures' order announcement demonstrates how company-specific developments can drive sharp movements even when the broader market remains subdued.

In the near term, investors should monitor market breadth, earnings updates, banking-sector developments and institutional fund flows before drawing conclusions about the sustainability of the recovery. Selective stock performance may continue to dominate while benchmark indices search for a stronger catalyst.

Rather than reacting to intraday movements alone, investors should focus on business fundamentals, valuation discipline and their individual investment horizons.