Business

IIE DIGITAL DESK : Mumbai, June 26, 2025 — The Indian banking sector received a powerful lift on Thursday, with the Nifty Bank index soaring to a record peak of 57,076 propelled by robust rallies in heavyweight private lenders HDFC Bank and Axis Bank .

Amid improving investor sentiment—bolstered by a temporary Israel–Iran ceasefire and optimism over global economies—mid‑week gains extended for the third straight session. The renewed risk appetite fueled broader market strength, with the sense of LIQUIDITY flowing into bank stocks especially strong .

HDFC Bank shares hit a historic high of ₹2,008, continuing a three‑day winning streak. Likewise, Axis Bank jumped around 1.5 percent to ₹1,231.60—both largely responsible for the Nifty Bank’s surge .

Other private lenders—ICICI, AU Small Finance, IndusInd, and Kotak Mahindra—also climbed, though the gains were more modest. Public sector counterparts like SBI, Canara Bank, and PNB lagged, registering slight declines.

Analysts point to a sequence of easing measures by the Reserve Bank of India (RBI) as instrumental in reviving confidence. Since February, the central bank has:

• Cut the repo rate by a total of 50 bps (25 bps in February and April, and 50 bps in June),

• Slashed CRR by 100 bps, freeing up additional liquidity,

• Relaxed project-finance norms, reducing provisioning needs.

These actions have collectively encouraged lending—particularly in infrastructure and real estate—to resume momentum .

Independent analysts such as Ajay Bagga and Bhavik Joshi highlight this policy push and a favorable macro environment as key to sustained credit growth: a weaker dollar, a healthy monsoon forecast, and rising household spending power.

Technical analysts remain bullish. Chandan Taparia of Motilal Oswal predicts the Bank Nifty could rise further to 58,000 within two to three weeks, with immediate support in the 54,500–54,000 zone—a confluence of 50‑day EMA and Fibonacci retracement levels .

Market watchers note that HDFC Bank and ICICI together account for approximately 50 percent of the index’s weight. Strong moves in these stocks have a disproportionate influence—particularly as ICICI edges toward record highs alongside HDFC Bank.

The rally in Nifty Bank was mirrored by broader market indices. The benchmark Sensex climbed about 600 points, while the broader Nifty 50 surpassed 25,400, buoyed by gains in metals and financials . Meanwhile, the Nifty Metal index extended its rally for the fifth session amid a softer US dollar.

With the index set for a fourth straight monthly gain, analysts warn of potential margin pressure amid credit expansion, even as net interest margins show improvement into FY26 .

Still, the broader outlook remains positive. As profits from financial services rise and macroeconomic conditions stay supportive, the banking sector appears poised for further upside. Chart analysts see 57,600 as the next major resistance, while global market stability and RBI’s liquidity stance will determine whether momentum continues.

Thursday’s record a high in the Nifty Bank—driven by HDFC Bank and Axis Bank—highlights a resurgent wave in India’s private banking landscape. With technical indicators trending bullish and policy support entrenched, market participants are optimistic that this bullish run could sustain into the coming weeks.

While challenges like margin compression and global volatility loom, the current alignment of monetary easing, macro backdrops, and private-sector execution gives India’s banking index strong grounds for continued growth.