Nifty Bank hits new all-time high again, tops 57,400 for the first time ever

Nifty Bank Surges to Record High: Tops 57,400 Mark for First Time

In a fresh milestone for the Indian equity markets, the Nifty Bank index on Thursday crossed the 57,400-mark for the first time in its history, driven by strong performances from private sector lenders and positive investor sentiment around the banking sector’s earnings and credit growth outlook.

The index, which tracks the performance of the 12 most liquid and large capitalized banking stocks listed on the National Stock Exchange (NSE), gained over 1.3% intraday, surpassing its previous all-time high touched earlier this month. It closed at 57,426.85, buoyed by robust buying in heavyweight constituents such as ICICI Bank, HDFC Bank, Axis Bank, and State Bank of India (SBI).

Banking Giants Drive the Rally

The key drivers of Thursday’s rally were large-cap banks, which have seen increasing traction from both domestic and foreign institutional investors. HDFC Bank surged nearly 2% following analyst upgrades, while ICICI Bank and Axis Bank continued their upward momentum amid strong quarterly projections and improved asset quality commentary.

SBI, the country’s largest lender, also contributed to the index's gains as investors priced in continued momentum in credit growth and stable net interest margins.

“The rally in Nifty Bank is a reflection of improving fundamentals in the sector. Private lenders have led the credit cycle recovery, and we’re seeing increasing clarity on asset quality with fewer surprises on NPAs. This is pushing the sector to rerate,” said Pankaj Pandey, Head of Research at ICICI Direct.

What’s Fueling the Optimism?

Several macro and sectoral factors are contributing to the record-breaking rally in the Nifty Bank index:

• Robust Credit Growth: RBI data indicates that credit growth in the banking system remains strong at around 15-16% YoY, primarily led by retail and MSME segments.

• Lower Slippages: Major banks have reported significant improvement in asset quality, with gross NPA ratios trending down across the board.

• Improved Liquidity Conditions: Recent commentary from the RBI has assured continued support for systemic liquidity, which has calmed concerns around interest rate volatility.

• Institutional Buying: FIIs have been net buyers in banking stocks for the past several weeks, banking on India's resilient economic story and stable monetary policy.

“There’s a clear reallocation of funds from IT and FMCG towards banking and financials. Given that banks are expected to post double-digit earnings growth for the next few quarters, the valuation comfort remains attractive,” said Meenakshi Batra, Fund Manager at Kotak Asset Management.

Market Context: Banking Index Outpaces Broader Indices

While the Nifty 50 and Sensex remained range-bound on Thursday, Nifty Bank outperformed, indicating a sector-specific rally rather than a broad-based market surge.

The Nifty Bank index has gained nearly 13% year-to-date, compared to an 8% gain in the Nifty 50. Investors are now increasingly turning bullish on the banking sector as it enters a phase of consistent earnings growth and margin stability.

Additionally, PSU banks, once laggards, have also caught up with private lenders. Banks like Bank of Baroda and Punjab National Bank posted double-digit gains in June alone, signaling widespread optimism.

Technical Indicators Signal Continued Strength

From a technical standpoint, analysts suggest the current trend shows no signs of exhaustion yet.

“With today’s breakout above 57,400, Nifty Bank is entering a new territory. If the index sustains above this level, we may see targets of 58,200–58,800 in the coming weeks. Support is now seen around 56,500,” said Ruchit Jain, Lead Analyst – Technicals at 5paisa.com.

The Relative Strength Index (RSI) is trending in the bullish zone, and no significant divergence is visible, indicating a continuation of upward momentum in the short term.

Investor Outlook: Should You Chase the Rally?

For retail and institutional investors, the fresh highs in Nifty Bank pose an important question—is it time to buy, hold, or book profits?

Many analysts believe the rally still has room to run, but advise selective stock picking rather than index-level buying at these elevated levels.

“We remain bullish on the sector, but prefer a stock-specific approach focusing on banks with strong retail franchise, digital capabilities, and consistent RoA improvement,” said Rahul Shah, Co-head of Research at Motilal Oswal.

Most brokerages maintain ‘Buy’ or ‘Overweight’ ratings on top lenders like HDFC Bank, ICICI Bank, and Axis Bank, citing healthy loan book expansion and normalized credit costs as key positives.

Banking Bulls Lead the Charge

The Nifty Bank’s latest all-time high underlines the growing investor confidence in India’s banking sector amid an improving macroeconomic environment. With fundamentals strengthening and technicals supporting further upside, the banking bulls appear firmly in control.

However, market veterans caution against overenthusiasm. A close watch on quarterly earnings, RBI policy signals, and global cues will be essential to sustaining momentum.