Nifty Bank extends gains for 3rd straight session; Federal Bank, BoB, PNB shares surge up to 2%

The increased possibility of another rate cut may have boosted the bank stocks.

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26 Aug, 2025 12:21

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Bank stocks recorded strong gains on April 16, pushing the Nifty Bank index higher in the green for the third consecutive session. This comes despite bulls losing grip of the market, with benchmark indices closing with marginal gains. Nifty Bank index jumped over 1.4 percent to end the session at around 53,118.

India's inflation eased to a 67-month low of 3.34 percent in March, according to data released by the Reserve Bank of India (RBI) on April 15. "The moderation in both headline and core inflation strengthens the case for a potential policy rate cut by the Reserve Bank of India in the coming days. With inflation now well within the central bank’s 4% target and core price pressures subdued, the current data underscores a favorable macroeconomic environment for monetary easing," said Mahendra Patil, founder and managing partner at MP Financial Advisory Services LLP. The increased possibility of another rate cut may have boosted the bank stocks.

IndusInd Bank shares were the top gainer on the index, rising nearly 7 percent to close at Rs 785.50 apiece. The rise in the stock price comes after the lender received external auditor's report on the discrepancies found in its derivatives portfolio. The external agency has found Rs 1,979 crore of 'negative impact' to the bank's net worth due to the derivative discrepancies. This represents 2.27 percent of the lender's total net worth, slightly lower than the bank's earlier estimate of 2.35 percent.

Axis Bank shares followed, rising over 4 percent to close at Rs 1,161 apiece. Bank of Baroda, Punjab National Bank (PNB), Canara Bank and IDFC First Bank followed, rising over 2 percent each.

Federal Bank, AU Small Finance Bank and State Bank of India (SBI) shares meanwhile closed over 1 percent higher each. Heavyweights HDFC Bank, ICICI Bank and Kotak Mahindra Bank shares meanwhile closed with marginal gains in the green.

Explaining the technical front of the index, Kotak Securities said, "The market continues to display an uptrend formation, indicating potential for further gains from [previous closing] levels. We believe the current market environment is bullish; however, due to temporary overbought conditions, we may see some profit booking at higher levels. As long as the bank-nifty remains above 51800 levels, the bullish sentiment is expected to continue. On the upside, it could retest the range of 52600 to 53,000. However, if it falls below 51,800, the chances of reaching levels of 51,200 to 51,000 would increase."

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.