Bank Nifty tops 56,000 to hit a fresh lifetime high, gains 10% so far this year

Federal Bank was the top gainer on the index.

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26 Aug, 2025 12:21

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Shares of banking index Bank Nifty hit a fresh record high in trade on Tuesday, June 3, as gains from heavyweights like HDFC Bank and State Bank of India propelled the index to a record high during the opening bell.

At 9.30 am, the index gave up its gains to trade in the red, after hitting a lifetime high of 56,161.40.

On the index, Federal Bank, AU Small Finance Bank and IndusInd Bank were the top gainers, rising between 0.5 and 1.2 percent each. Heavyweights such ICICI Bank, Axis Bank, along with Kotak Mahindra Bank were the top losers on the index, sinking up to 80 basis points.
The Nifty Bank index has gained 10 percent so far in 2025, delivering a one-year return of 9.7 percent. From its 52-week low, the index has risen 15 percent, reflecting a steady recovery in the banking sector.

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Rate cut sensitive stocks have been in focus, as the Reserve Bank of India is expected to trim the country's benchmark lending rate by 25 basis points in its upcoming meeting on June 6, 2025.

Under the stewardship of the new Governor Sanjay Malhotra, over the past two meetings, the central bank has trimmed the repo rate by 50 basis points, from 6.5 percent to 6 percent.

Going ahead, most economists are penciling in a 25 bps cut during the RBI Monetary Policy Committee's meeting in June, with some expecting a terminal rate between 5.25 and 5 percent during this quantitative easing cycle.

Most estimates peg the terminal rate between 5 and 5.25 percent. The easing food prices, reflecting reflationary pressures, caused the headline inflation to cool. Going ahead, favourable weather conditions in the form of La Nina and above-normal monsoon expectation should aid food prices in the near term.

Further, the strong GDP growth recorded during the March quarter of financial year 2024-25 at 7.4 percent, reflects the robustness of the economy. Economists at Emkay Global said, "The Q4 growth print partly reflects the back loaded spending effect of the government, both centre and states, led more by public capex spending. As a whole the growth has been in line with the government estimates, with capital formation staying broadly steady."

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