Nifty Bank Rockets to New Heights as Banking Rally Powers Into Year-End

Nifty Bank pushed into uncharted territory on Thursday, marking another chapter in its remarkable run as the index climbed to a fresh record during the session. With this move, the banking gauge has now stretched its winning streak to a third straight day, reflecting the strong confidence pulsing through India’s financial sector.

The index rose 0.2% to touch a new lifetime high of 59,897.50, placing it more than 25% above its March 2025 low and adding 2% in just three sessions. Over the past year, Nifty Bank’s strength has consistently outpaced the broader market, delivering a 15% gain against the Nifty 50’s 9.5%. Short-term momentum remains equally firm, with the index advancing steadily over the past six, three and one-month periods.

A closer look at individual bank performances reveals how broad the rally has been. Except for IndusInd Bank, every constituent has gained over the past year. AU Small Finance Bank stands out with a notable 64% rise, followed by strong moves from Canara Bank, IDFC First Bank, Federal Bank and Kotak Mahindra Bank. The sector’s resilience has been one of the market’s defining narratives this year.

A Strengthening Sector Built on Credit Expansion and Stability

Industry analysts expect Indian banks to step into the second half of FY26 with even stronger footing. Improving economic indicators, easing liquidity pressures and steady asset quality are setting up a robust foundation for growth.

CareEdge Ratings projects credit growth in FY26 to fall between 11.5% and 12.5%, supported by retail and MSME lending, while corporate credit is gradually shifting back toward bank channels. At the same time, deposit growth continues to trail, keeping the credit-to-deposit ratio elevated near 80%.

The agency expects net interest margins to stabilise as funding costs ease, backed by better liquidity conditions and more predictable interest rates. Asset quality is also likely to remain healthy through FY26, driven by lower slippages, stronger recoveries and disciplined write-offs.

With consumption indicators improving and banks maintaining stable profitability metrics, investors have been reinforcing their bullish stance on the space.

60,000 Within Reach as Technical Momentum Builds

Market strategists believe the latest breakout places Nifty Bank within striking distance of the 60,000 milestone before the end of December.

Analysts note that a sustained move above key resistance levels would validate the next leg of the rally. At the same time, they warn that dips below critical support zones could invite temporary corrections. The overarching view remains optimistic, with improving fundamentals providing a sturdy backbone to the index’s technical strength.

The broader message from market experts is consistent: stay selective. With the banking rally nearing a psychologically significant threshold, traders are being encouraged to focus on fundamentally strong and technically stable names, rather than chasing momentum at random.

As Nifty Bank edges closer to rewriting yet another record, the sector’s blend of growth, stability and market leadership continues to cement its role as one of India’s most influential market stories this year.