Bank Nifty hits another record high on strong gains in HDFC Bank, Axis Bank

Nifty Bank in focus today: Indian banking stocks extended their winning streak for the third consecutive session on Thursday, June 26, supported by favourable global cues following the Israel-Iran truce, which has improved risk-on sentiment toward the Indian stock market.

This, combined with expectations of a potential rebound in credit growth driven by the central bank’s recent liquidity measures, has made banking stocks increasingly attractive to investors.

Amid strong contributions from private sector banks including HDFC Bank, Axis Bank, and ICICI Bank, the Nifty Bank index climbed to a new record high of 57,076, surpassing its previous peak of 57,049 touched on June 9.

The sustained demand for banking stocks on Dalal Street is also likely to help the index close June in the green, marking its fourth consecutive monthly gain — a streak last seen in March 2016.

The Reserve Bank of India (RBI) last week relaxed project finance regulations to make lending more affordable for infrastructure and industrial projects. While the draft guidelines had proposed sharply higher provisioning requirements of up to 5% during the construction phase, the final norms are significantly more lenient.

Provisioning has been set at 1.25% for commercial real estate and 1.00% for residential and other exposures during construction, with existing lower rates retained once projects become operational.

These measures are part of a broader set of easing steps taken by the RBI over recent months. The relaxation in final norms for gold loans and liquidity coverage ratio (LCR), along with the deferment of Expected Credit Loss (ECL) implementation, signal a clear intent to revive credit growth.

Additionally, recent aggressive rate actions—including a 50-basis point cut in the repo rate and a 100-basis point reduction in the cash reserve ratio (CRR) during the June 2025 MPC meeting—underscore the central bank’s commitment.

Despite these efforts, credit growth remains subdued at 9.0% year-on-year as of end-May 2025, marking the lowest level since March 2022 and reflecting a modest 0.2% growth year-to-date compared to 2.1% during the same period last year.

Bank Nifty poised for further upside, says Bajaj Broking

Bajaj Broking said the Bank Nifty is likely to scale up to the 57,600 mark in the coming weeks. “The daily 14-period RSI remains in an uptrend, further validating the bullish structure. Key structural support is placed in the 54,500–54,000 zone, marked by the confluence of the 50-day EMA and key Fibonacci retracement levels, which act as a strong downside cushion,” the brokerage said.

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