Sensex falls 0.19%, Indian small caps slide 2.37% as financials weigh
Key Facts
Indian stocks closed lower on 21 October 2026, with losses deepening among small and mid-sized companies. The Sensex ended at 73,709.69 points, down 143.21 points, or 0.19%, according to Upstox. The Nifty 50 closed at 22,811.35 points, losing 77.60 points, or 0.34%. Losses were steeper in the Nifty Midcap 100, which shed 922.10 points, or 1.58%. The Nifty Smallcap 100 dropped 448.45 points, or 2.37%, outpacing declines in the two main benchmarks. Trading followed the closure of Indian financial markets the previous Tuesday for a public holiday, according to Reuters.
The session had opened higher, led by technology stocks and Reliance, with all major sectors posting gains at the open, according to Reuters. But financials ended trading down 1.2%. Bajaj Finance fell 3.3% after disclosures pointed to signs of stress in gold-backed loans, as described by the agency. By contrast, the information technology index rose 2.9%, supported by gains in sector stocks. L&T Technology Services jumped 10.5% after reporting revenue and profit growth for the September quarter. Losses spread to other sectors, with auto stocks falling 1.5% and metals stocks declining 1.7%.
Pressure in gold-backed lending follows a rapid expansion in such bank loans, which grew 83% year on year in August 2026, according to Reuters. Outstanding loans totalled 5.6 trillion rupees that month. At Bajaj Finance, the share of assets classified as stage two and stage three rose 15 basis points in the July–September quarter from the previous quarter. The company stopped offering short-term gold loans, according to the agency. The product was discontinued after contributing significantly to the increase in the company's non-performing or overdue assets.
Against this backdrop, Brent crude futures topped $110 a barrel during the session, according to Moneycontrol. The platform said higher oil prices increase India's import bill and put pressure on the fiscal deficit and corporate earnings. Foreign investors' net sales of Indian equities since the start of the year totalled nearly $33 billion, according to a Reuters report published on 16 October 2026. Alongside these pressures, Jio Platforms' $3.2 billion initial public offering drew strong investor demand, according to the agency. The shares on offer were fully subscribed in less than two hours, with subscriptions reaching 3.16 times the offering by the end of the first day. The offering values the company at up to $108.3 billion. Share allocations to investors ahead of the public offering included the Abu Dhabi Investment Authority and BlackRock.
On prices, annual headline inflation accelerated to 5.54% in the preliminary September reading, compared with a final reading of 4.83% in August, according to India's statistics ministry. The result exceeded economists' forecast of 5.4% in a Reuters poll. Annual rural inflation stood at 6.08% in September. In urban areas, consumer prices rose 4.88%, remaining below the rural rate. Annual food inflation climbed to 7.74% in September from 5.97% in August, according to the ministry. The annual increase in onion prices accelerated sharply to 108.09%, compared with 48.78% the previous month.
Monetary Policy Committee minutes published on the day of the session showed that India's central bank unanimously raised the repo rate by 25 basis points to 5.50% at its previous meeting in October, according to Reuters. The bank shifted its stance to "calibrated tightening", as described in the minutes. The governor said the shift meant ruling out interest rate cuts. The central bank expects inflation to average 6% in the October–December 2026 quarter. The statistics ministry is scheduled to publish the October inflation reading on 12 November 2026, or the next working day if the date falls on a holiday. HSBC economists expect a 50-basis-point rate increase in December, according to Reuters.