The flagship banking index of the Indian stock market – Nifty Bank – surged to a fresh record high on Monday, November 17, topping the 59,000 level for the first time.
Nifty Bank hit a fresh high of 59,000.50 today, surpassing its earlier high of 58,615.95 as the index gained 0.83% in intraday deals today. With today’s rise, the banking pack has seen a 6% gain in six months and 15% year-to-date (YTD).
Kotak Mahindra Bank, AU Small Finance Bank, IndusInd Bank, SBI, and Axis Bank were among the major index contributors. In the late afternoon trade, AU SFB emerged as the top gainer, with a 2.5% rise.
Canara Bank, PNB, Federal Bank, Kotak Bank and IDFC First Bank were among the best-performing stocks, rising between 0.7% to 2%.
What sparked a rally in Nifty Bank index?
A host of triggers, ranging from positive earnings outcomes, valuation comfort, to reports of mergers in the PSU banking space, sparked this rise in the Nifty Bank index today.
Strong earnings momentum
According to Axis Securities, the soft patch seen in H1FY26 is firmly behind us, as the banks delivered an 11/4% YoY/QoQ credit growth, with PSU banks outperforming private peers, and retail and secured SME segments driving momentum.
For banks, Axis Securities builds in a 14% CAGR credit growth over FY26-28E, alongside improving deposit growth that should help maintain LDRs within a manageable range.
Valuation comfort visible
Nifty Bank Index’s price-to-book ratio remains below its five-year average, suggesting more room to run.
“The rally is supported by valuation comfort, largely due to the strong earnings that most of these banking names reported in Q2. Additionally, there is reasonable growth on the distribution side, which adds to confidence. With expectations that there won’t be further compression of NIMs, earnings are likely to remain stable,” said Ajit Mishra of Religare Broking.
Consolidation in banking space
Additionally, apart from strong profitability, ongoing privatisation and merger initiatives are expected to boost the overall sector. There have been reports that the government is mulling the merger of several PSU banks into larger lenders, which is another positive factor.
Against this backdrop, several PSU bank stocks rallied up to 4% today.
Nifty Bank: Technical outlook
Kunal Kamble, Sr. Technical Research Analyst at Bonanza, said that Nifty Bank hit a record high, breaking decisively above its recent consolidation range between 57,500-58,800, and confirming a strong bullish continuation.
“The index is trading comfortably above the 20 & 50 EMA, both of which are rising and reinforcing the ongoing uptrend. With the breakout validated by a strong candle and sustained momentum, the immediate resistance zone now lies at 59,200-59,500, and a move beyond this could open upside targets toward 60,200 and 61,000-61,200.”
On the downside, 58,300-58,000 acts as the first important support and a healthy retest area, followed by strong support at 57,545-57,572-the lower boundary of the previous range, he added.
A break below this may trigger a deeper pullback toward the 50-EMA (56,709), while the long-term structural support remains near 53,850, Kamble cautioned.
With the RSI hovering around 71, Nifty Bank is exhibiting overbought conditions, but in strong bull markets, such readings often sustain for extended periods, he said. “Overall, the trend remains firmly bullish as long as the index holds above 58,000, and the breakout suggests further upside potential in the coming sessions.”