Nifty Bank hits record high: The Nifty Bank index touched yet another record high during Thursday’s trading session, extending its winning streak to a third consecutive day amid broadly positive market sentiment.
The banking benchmark gained 0.2%, hitting a fresh all-time high of 59,897.50, and is now more than 25% above its 52-week low of 47,702.9, recorded in March 2025. The index has also added 2% over the last three trading sessions, underscoring strong momentum in India’s banking space.
The index’s performance has outpaced the broader market over the past year. Nifty Bank has risen over 15% in 12 months, significantly higher than the Nifty 50’s 9.5% advance. Short-term gains remain healthy as well, with the banking gauge up 8% in six months, 11% in three months, and 3% over the past month.
Notably, in the last one year, all constituents except IndusInd Bank posted gains. AU Small Finance Bank led the rally with a 64% surge, followed by Canara Bank at 49%, IDFC First Bank at 25%, Federal Bank at 22%, and Kotak Mahindra Bank at 20%.
Sector Outlook Strengthens on Credit Growth & Stable NIMs
Industry experts believe the second half of FY26 will be stronger for Indian banks, supported by improving macro indicators, easing funding costs and sustained asset quality.
CareEdge Ratings highlighted robust credit momentum for the year ahead, noting: “Banking credit is expected to grow at 11.5%–12.5% year-on-year in FY26, driven by retail and MSME segments, with corporate lending showing some momentum as borrowers shift from bond markets to banks.”
However, the agency also pointed out that deposit growth continues to lag, keeping the credit-to-deposit ratio elevated at around 80%. CareEdge added that net interest margins should stabilise in the coming months as funding costs ease with improved liquidity and steady interest rates.
“Banking asset quality is expected to remain benign in FY26 on the back of lower slippages, higher recoveries and write-offs,” the agency noted.
Overall, the fundamental backdrop remains strong: improving consumption indicators, stable margins and healthy asset quality are reinforcing institutional confidence in banking stocks.
Analysts See Nifty Bank Crossing 60,000 in Dec
Technical indicators also point to strength, with analysts expecting the index to breach the psychological 60,000 mark by year-end.
Amruta Shinde, Research Analyst at Choice Broking, said a decisive move above key resistance would confirm renewed bullish momentum. “For December-end, a decisive close above 59,300 would be required to revive strong bullish momentum and open the door toward 59,400–59,500,” she said. However, she warned that a breakdown could trigger a deeper correction.
“If the index breaks below 58,575, a pullback toward 58,000–57,645 cannot be ruled out.”
Om Ghawalkar, Market Analyst at Share.Market, echoed a bullish stance, citing both technical momentum and strong fundamentals.
“The index’s decisive breakout confirms a robust technical uptrend, suggesting that the recent high is a new floor, not a ceiling,” he said. According to him, Nifty Bank has the potential to comfortably move above 60,000 by December-end, supported by improving asset quality, strong credit growth and sector leadership from top-weighted banks.
Analysts advise traders to stay selective, focusing on fundamentally strong and technically sound banking names rather than chasing prices.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
