Nifty PSU Bank logs biggest weekly surge in two years; PNB, Bank of India, Bank of Baroda among top performers

Résumé détaillé

PSU banking stocks rallied for a third straight week, lifting the Nifty PSU Bank index 8% to its highest level since March. Among individual stocks, Punjab National Bank emerged as the top performer, surging 13.3% to ₹143.

Shares of PSU banking stocks have emerged as hot picks among Dalal Street investors this week, turning the sector into one of the market's stellar performers, with several stocks posting double-digit gains. Better-than-expected second-quarter results, expanding credit demand and a revival in broader market sentiment have all supported the rally.

Extending its weekly winning run to a third consecutive week, the Nifty PSU Bank index advanced another 8%, marking its biggest weekly in seven months. Over the past three weeks, the index has gained a cumulative 15%, with the winning streak pushing it to its highest level since March.

Among individual stocks, Punjab National Bank emerged as the top performer, surging 13.3% to ₹143. It was followed by Bank of India, Bank of Baroda and Punjab & Sind Bank, all of which rallied between 9.5% and 11%.

Other stocks in the pack, including Union Bank of India, Bank of Maharashtra, State Bank of India, Canara Bank, Central Bank of India, Indian Bank and UCO Bank, also closed higher, posting gains in the range of 4% to 8%.

India's credit growth is gaining momentum as festive-season spending drives consumer borrowing, while companies are also increasing their reliance on bank loans.

Banks have raised nearly $133 billion through foreign currency deposits from non-resident Indians under a special Reserve Bank of India (RBI) scheme, supporting deposit mobilisation and credit growth. However, the higher cost of attracting these deposits has put pressure on banks' margins.

Domestic brokerage firm Motilal Oswal remains upbeat on systemic credit growth and estimates 16.5% year-on-year (YoY) growth for FY27, factoring in substantial FCNR(B) inflows. It expects banking sector earnings to rebound, delivering a compound annual growth rate (CAGR) of around 17% over FY26-FY28, fuelled by approximately 17% CAGR in net interest income (NII).

Kotak Institutional Equities said the banking sector was positioned to benefit from the changing interest rate…

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