Private Banks Slip, PSU Banks Shine Amid Earnings Season; Crude Climbs Above $88 - Paper by Pocketful
Market Recap: 20th July, 2026
Stock News Highlights
Punjab National Bank (+5.66%): Shares surged after the lender reported a three-fold jump in Q1 FY27 net profit to ₹5,253 crore, while revenue remained steady at ₹37,231 crore. Asset quality also improved, with gross NPA declining to 2.78% from 3.78% a year earlier.
Reliance Industries (-0.31%): Shares ended marginally lower after Reliance Retail’s Q1 FY27 profit fell 14.2% YoY to ₹2,806 crore despite revenue rising 8.2% YoY to ₹79,745 crore, as higher digital commerce investments weighed on margins. The company also added 252 stores, taking its total store count to 20,169.
HDFC Bank (-5.12%): Shares tumbled after the lender’s Q1 FY27 earnings missed Street estimates despite reporting a 5% YoY rise in net profit to ₹19,060 crore and a 6.7% increase in net interest income (NII) to ₹33,536 crore. Net interest margin (NIM) slipped to 3.26%, while other income fell 41% YoY, prompting investor concerns over profitability and margins.
Axis Bank (-5.46%): Shares declined sharply after investors reacted to a 16 bps QoQ decline in net interest margin (NIM) to 3.46% and a management reshuffle, overshadowing a strong Q1 FY27 performance. The bank reported a 23% YoY rise in net profit to ₹7,114 crore, supported by healthy business growth.
Sectoral Performance
Nifty PSU Bank (+2.78%): The index advanced sharply after strong Q1 earnings from public sector lenders boosted sentiment. All constituent stocks ended in the green, reflecting broad-based buying and improved investor confidence across the PSU banking sector.
Nifty Pharma (+1.40%): The index gained as investors rotated toward defensive sectors amid broader market weakness. Buying was supported by expectations of stronger export demand, a weaker rupee, and potential US FDA approvals, led by Torrent Pharma, Sun Pharma, and Cipla.
Nifty Private Bank (-2.27%): The index declined sharply as investors reacted to mixed Q1 FY27 earnings from major private lenders. Pressure on net interest margins (NIMs), moderating CASA growth, and softer profitability overshadowed healthy credit growth, triggering broad selling in heavyweight banks and dragging the sector lower. Steep declines in heavyweight stocks such as HDFC Bank, Axis Bank, and Kotak Mahindra Bank dragged the sector lower.
Nifty Financial Services (-1.22%): The index ended lower as mixed Q1 earnings and profit booking weighed on the sector. Despite 11 gainers against 8 losers, sharp declines in heavyweight private lenders and select financial stocks dragged the index into negative territory.
Market Insights
Technical Level: Nifty opened with a gap-down and witnessed sharp selling in early trade, triggering heavy liquidation. The index later recovered but remained range-bound through the first half. In the second half, it found support around 24,130 and gradually moved higher, facing resistance near 24,260 before closing close to that level. Despite the late recovery, the index ended the session in negative territory.
Advance-Decline Ratio: Market breadth remained positive, with 1,778 stocks advancing against 1,501 declining, indicating broader buying interest despite the benchmark indices ending the session in negative territory.
The Big Picture: Crude oil climbed above $88 per barrel as the US continued its ninth consecutive night of strikes on Iran, raising geopolitical tensions. Sustained crude prices above $85 could increase India’s import bill, inflationary pressures, and weigh on overall market sentiment.
FII/DII Activity (July 20, 2026): FIIs remained net sellers with outflows of ₹736 crore, while DIIs continued to provide support, remaining net buyers with inflows of ₹705 crore.
Watch Out For Tomorrow
IPO Corner: Caliber Mining & Logistics IPO Closing for subscription Tomorrow, making the key primary market offerings with good GMP.
Macro: UK Unemployment Rate (May) data scheduled for release tomorrow.
Market Watch: Markets remained under pressure as investors booked profits despite healthy Q1 earnings from private banks. Rising crude oil prices and Middle East tensions weighed on sentiment, while defensive sectors like Pharma outperformed. PSU banks rallied on earnings optimism, with investors now shifting focus to upcoming results from Bajaj Auto and TVS Motor.
Word of the day
VWAP (Volume Weighted Average Price)
Meaning: VWAP is the average price of a stock weighted by its trading volume throughout the day. It helps traders identify the stock’s fair value and assess whether it is trading above or below the average market price.
Example: If a stock is trading above its VWAP, it may indicate strong buying momentum, while trading below VWAP often suggests selling pressure.