Banking stocks surge as ICICI Bank, SBI, Kotak lead rally; Bank Nifty nears 52-week high

Investments Indian Investments

Posted by NewAdmin on 2025-04-17 08:48:22 |

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Banking stocks saw a sharp surge on April 17, with the Bank Nifty index emerging as the best-performing sectoral index in the Indian stock market. As of 1:45 pm, the index had climbed 2.3 percent to reach 54,300, driven by strong gains in heavyweight stocks such as ICICI Bank, SBI, and Kotak Mahindra Bank, each of which soared up to five percent. The Bank Nifty was just 100 points away from its 52-week high of 54,467.35, signaling renewed bullish sentiment in the sector. Notably, all the stocks in the index, except IDFC First Bank, were trading in positive territory.

The rally comes ahead of the quarterly earnings reports from major banks, with ICICI Bank and HDFC Bank scheduled to announce their March FY2025 results on April 19. Market participants appear optimistic about the performance of these financial giants, contributing to the upward momentum.

According to Shrikant Chouhan, Head of Equity Research at Kotak Securities, the strong performance of banking stocks compared to broader market indices reflects investor confidence in India’s favorable macroeconomic landscape. Investors are increasingly turning to large-cap banking stocks that offer stability and strong fundamentals, particularly in a global environment riddled with economic uncertainties and trade tensions.

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted that sectors driven by domestic consumption, such as financials, telecom, aviation, cement, and select automobile segments, are witnessing record highs. He attributed this trend to renewed foreign institutional investor interest in Indian equities, especially as economies like the US and China face mounting challenges.

Additionally, the recent monetary policy decision by the Reserve Bank of India has further boosted the sector. On April 9, the RBI’s Monetary Policy Committee cut the repo rate by 25 basis points, marking the second rate cut in a span of five years. This reduction in borrowing costs allows banks to improve their margins by easing the pressure on interest payouts. The move is expected to enhance bank profitability in the near term, adding further impetus to investor enthusiasm in the banking sector.

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