The markets are seeing a steady upmove and the bank stocks are among the star performers in trade today. Nifty Bank Index surged over 600 points and ICICI Bank, HDFC Bank are among the key gainers. Kotak Mahindra Bank hits 52-week high as the Sensex soared over 850 points to cross 75,000 and the Nifty 50 climbed more than 250 points to trade above 22,750.
Why are Bank stocks surging?
The recent rally in banking stocks is largely driven by buying interest across financial and banking counters. Several factors, including reasonable valuations, improved liquidity, and expectations of policy support, have played a key role in the rallying of banking stocks.
1. Positive market sentiment
Most market analysts believe that the Banking stocks are seeing a domino effect of the positive market sentiment overall. On the whole, the markets are seeing steady buying on the back of attractive valuation after recent correction as well as optimism about the earnings outlook improving going forward. Most banking stocks are reflecting this positive sentiment in the market
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The Bank Nifty is down 5% in 2025 so far. This correction has also made valuations relatively attractive, According to Shrikant Chouhan, Head Equity Research, Kotak Securities, “If the Bank Nifty closes above 48800, the sentiment could change, and it may even retest the levels of 49500 in the near term.”
3. Experts bet on the banking sector
In addition to this, the upcoming tax rebates and potential benefits from the 8th Pay Commission are expected to boost consumer spending, further a boost to the banking and financial services sector.
In an exclusive interaction with Financial Express.com, Nilesh Shah, Managing Director at Kotak Mahindra Asset Management Company had highlighted that , “We are investing mainly on a bottom-up basis in banking and financial services where we believe valuations are reasonable.”
Major gainers in the Banking sector
The Nifty Bank index surged over 1.4% in intraday trading, rising more than 600 points to cross the 49,000 mark for the first time in two weeks. Among the top gainers,
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