A Day of Heavy Selling on Dalal Street: What Dragged the Sensex Down 1,837 Points

The BSE Sensex closed at 72,696 on March 23, 2026, down 1,837 points or 2.46 per cent in a single session. The index opened at 73,732, touched a low of 72,558 Intraday and never recovered. The day's heatmap told the full story a sea of red with virtually no safe corners to hide. Of the thirty Sensex constituents, only HCL Tech, Power Grid and Infosys managed to end in the green. Everything else fell, and the selling was not gentle.

Titan was the worst performer at -6.24 per cent, followed by Trent at -5.90 per cent, UltraTech Cement at -5.20 per cent, Indigo and BEL both at -4.85 per cent, and HDFC Bank at -4.70 per cent. The broader damage was equally severe Bajaj Finance down 2.23 per cent, ICICI Bank down 1.84 per cent, Axis Bank down 2.79 per cent, Maruti down 1.97 per cent, M&M down 3.55 per cent and Adani Ports down 4.49 per cent. This was not a single trigger correction. Several forces converged on the same day.

Understanding What Fell and Why It Matters

Before getting into the specific stories, it helps to understand the weight these companies carry inside the Sensex and why their moves matter so disproportionately to the index.

Financial services as a sector account for 38.88 per cent of the BSE Sensex, the single largest sectoral allocation in the index by a wide margin. Within that, the top five Sensex companies by weight are Reliance Industries at roughly 12.78 per cent, HDFC Bank at 8.02 per cent, Bharti Airtel at 7.51 per cent, SBI at 6.52 per cent and ICICI Bank at 5.95 per cent. In market capitalisation terms, Reliance stands at Rs 19.05 lakh crore, HDFC Bank at Rs 11.45 lakh crore, Bharti Airtel at Rs 10.24 lakh crore, SBI at Rs 9.52 lakh crore and ICICI Bank at Rs 8.75 lakh crore.

When names of this size move down 2 to 5 per cent in a single session, the index does not need much else going wrong to end deep in the red. Today, two of those names had specific company level problems layered on top of a weak global environment. The combination was damaging.

HDFC Bank: A Governance Crisis That Is Getting Harder to Dismiss

HDFC Bank fell 4.70 per cent today to Rs 743.75. That number alone understates the deeper damage. Over one week the stock is down 11.51 per cent. Over one month it has fallen 19.49 per cent. Year to date the decline stands at 24.93 per cent. Over three years, while the Sensex has returned 25.5 per cent, HDFC Bank has delivered -4.81 per cent. Over five years, a period in which the Sensex returned 45.24 per cent, HDFC Bank has returned -0.86 per cent. These are not just underperformance numbers. For India's largest private sector bank, with an 8 per cent weight in the Sensex and deep presence in every Mutual Fund and FII portfolio in the country, this trajectory is being watched with serious concern.

The trigger for the recent acceleration in selling was the abrupt resignation of Atanu Chakraborty as Part-Time Chairman and Independent Director on March 18, 2026. His resignation letter cited that certain practices at the bank over the past two years were not in congruence with his personal values. That phrasing, coming from the chairman of the bank, was not a routine exit statement. Markets read it as a signal of an internal governance rift and reacted accordingly, wiping out roughly Rs 1.3 lakh crore of market capitalisation in a matter of sessions.

The bank moved quickly. RBI approved Keki Mistry, former MD of HDFC Ltd, as Interim Part-Time Chairman within hours of the resignation. On March 19, the bank convened an emergency analyst and investor call with the full board present. The message from the board was consistent: there were no material issues, no specific governance failures, no operational problems. Chakraborty was asked by board members what triggered the resignation and he did not provide specific reasons. Keki Mistry stated plainly that he would not have taken on the responsibility at the age of 71 if governance standards did not align with his principles.

Investors on the call from Citigroup, Macquarie, Blackrock, ADIA and others pushed hard for specifics. The board held its ground but could not provide a satisfying answer to one central question: if nothing was wrong, why did the chairman resign citing values and ethics? That unanswered question is what continues to weigh on the stock.

Adding to the pressure, media and brokerage reports indicate that three senior HDFC Bank executives were terminated for their alleged role in mis-selling Credit Suisse AT1 bonds to NRI clients through the bank's Dubai and Bahrain branches. These bonds were reportedly pitched as safe, fixed deposit like instruments with assured higher returns which is fundamentally misleading given that AT1 bonds carry write-down risk and can be converted to equity when an issuer's capital falls below trigger levels. This episode adds a conduct dimension to what was already a governance headline.

The structural concern for investors is that HDFC Bank has been underperforming for an extended period. The post merger integration of HDFC Ltd into HDFC Bank has taken longer to translate into earnings traction than the market anticipated. And now, a governance cloud has arrived at a time when investor patience was already being tested.

SBI: A Rs 6,337 Crore Tax Demand and What It Actually Means

SBI fell 2.52 per cent today to Rs 1,031.70. The context here is a tax demand notice of Rs 6,337 crore including interest, received from the Income Tax Department under sections 143(3), 144C(3) and 144B for assesSMEnt year 2023-24. The department has disallowed certain deductions and expenses claimed by the bank, resulting in this demand.

SBI has been transparent in its disclosure. The bank has stated clearly that it is already in litigation on similar grounds from earlier years, that it will contest the order through appellate authorities, and that there is no impact on operations or business activities. The disclosure was made under Regulation 30 of SEBI LODR precisely because the amount crossed the materiality threshold.

This needs to be put in perspective. SBI reported a net profit of over Rs 61,000 crore in FY25. A Rs 6,337 crore tax demand that is being contested and relates to an assessment year already in dispute is not an existential issue for a bank of this scale. Tax disputes of this nature between large PSU banks and the Income Tax Department are not uncommon and the outcomes at appellate levels have historically been mixed. The market reaction in SBI has been measured compared to HDFC Bank, reflecting the fact that investors correctly see this as a legal process matter rather than a fundamental business concern.

The Broader Picture

Today's fall was not entirely about HDFC Bank and SBI. The global backdrop has deteriorated meaningfully. Crude oil at elevated levels, the rupee under pressure, geopolitical tensions in West Asia, and ongoing uncertainty around US trade policy are all feeding into risk-off positioning. Financial stocks, which make up the largest sectoral weight in both the Sensex and Nifty, are particularly exposed when sentiment turns cautious because they carry the highest index weight and therefore see the most concentrated selling during outflows.

The Sensex at 72,696 is now sitting close to its 52-week low of 71,425, a level touched in April 2025. The all-time high of 86,159, hit in January 2025, is now 16 per cent away. That gap reflects a market that has been correcting steadily through 2025 and into 2026 not a crash, but a grinding derating driven by a combination of elevated valuations, slowing earnings momentum, global uncertainty and now specific governance concerns at some of India's most systemically important institutions.

For investors in HDFC Bank specifically, the question is no longer just about valuation. It is about whether the governance situation gets clearer or murkier in the weeks ahead. The bank's fundamentals — loan growth, NIMs, asset quality remain reasonable. But markets do not separate governance concerns from financial performance easily, especially in banking, where trust is the product. Until there is clarity on what actually prompted Chakraborty's resignation, the stock is likely to remain under pressure regardless of quarterly numbers.

Disclaimer: This article is for informational purposes only and not investment advice.