Bank Nifty index fell 0.5% on October 19 as private banks like Axis Bank, HDFC Bank led the losses in the sectoral index.
Private sector banks dropped 1.7%, with HDFC Bank and Axis Bank losing 2% and 4.1%, respectively, after missing profit views for the July-September quarter.
Weaker treasury income and higher provisions for bad loans weighed on HDFC Bank, while Axis Bank reported higher operating expenses and weaker other income. Net interest margins dropped at both.
On the other hand, public sector banks rose 2.2%, led by Punjab National Bank's 5.4% surge after it reported expansion in net interest margin.
"Investors clearly seem to be preferring PSU bank stocks after quarterly results as strong FCNR deposits are weighing on net interest margins of private banks," said Anita Gandhi, head of institutional business at Arihant Capital Markets.