Shares of state-owned banks such as SBI, Bank of Maharashtra, and Indian Bank have been flying high lately as Dalal Street staged a strong rebound. In the previous session, the Nifty PSU Bank index surged nearly 4%, marking its biggest single-day gain in almost two years.
Union Bank of India, Punjab National Bank, Bank of India, and Bank of Baroda emerged as the top gainers, with all 12 constituents of the index closing higher, posting gains ranging between 0.7% and 5.6%.
To be precise, PSU bank stocks have been in recovery mode since late October, gaining around 12% from their recent lows.
Investors have been encouraged by the sector's strong performance in the September quarter, with banks reporting healthy credit growth, improving asset quality, robust interest income growth, and a reduction in overall non-performing assets.
In addition, the return of overseas investors has also supported the rally, pushing the Nifty PSU Bank index to its highest level since April.