Banking on Momentum: Strong Q2 Earnings Lift Bank Nifty to Record Heights

Bank Nifty surged past the 58,000-mark to a record 58,242.50, powered by robust second-quarter results from private lenders like AU Small Finance Bank, Federal Bank, and IDFC First Bank. Analysts foresee the next resistance near 58,300, with support levels around 57,000, indicating sustained bullish momentum in the sector.

The banking index hit new highs on October 20, crossing the 58,000 mark for the first time, driven by strong earnings performance across private lenders. The Bank Nifty climbed more than 500 points, or about 1 percent, to close at 58,242.50, signaling renewed investor optimism in the banking sector.

Key Market Drivers

AU Small Finance Bank led the rally, surging nearly 8 percent after reporting steady operational growth. While its Q2 FY26 net profit fell 2 percent year-on-year to ₹561 crore, its net interest income rose 9 percent to ₹2,144 crore, highlighting robust interest margin performance.

Federal Bank and IDFC First Bank also delivered remarkable results, each gaining around 7 percent on the back of strong balance sheet growth and improving credit quality.

Axis Bank, PNB, and Canara Bank rose over 2 percent, while large caps HDFC Bank and Kotak Mahindra Bank inched higher, supporting sector breadth.

Mixed Performance Across Majors

ICICI Bank, however, slipped over 2 percent amid moderate loan growth concerns, slightly capping the index’s upside. Analysts, though, remain upbeat about the medium-term trend, citing strong fundamentals and improving credit demand as key tailwinds for the sector’s continued recovery.

Technical Outlook and Expert Views

Analysts at Choice Broking noted that the Bank Nifty now finds immediate resistance at 58,300, followed by 58,683, while key support levels lie between 57,000 and 56,850. The index’s Relative Strength Index (RSI) stands at 63.2, indicating strengthening momentum.

Ajit Mishra of Religare Broking expects the rally to extend toward 59,000, provided the index sustains above the 57,000 support zone. Amol Athawale of Kotak Securities echoed this view, emphasizing the importance of holding the 57,000–56,700 area for continued bullish sentiment.

Market Sentiment

Overall, the banking pack’s outperformance has reinforced broader market confidence, with analysts predicting that sustained institutional inflows and stable Q2 earnings could push the index toward 60,000 levels over the coming sessions.

Sources: Moneycontrol, 5paisa, CNBC-TV18, Choice Broking, Religare Broking.

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