Indian banking stocks continued to trade higher for the fourth straight session on Friday, January 02, as sentiment towards the sector strengthened following the release of December quarter updates of select banks, improving credit demand, and expectations of strong performance in Q3FY26.
The Nifty Bank index rose 0.73% to reach a fresh record high of 60,152, surpassing the previous peak of 60,114, registered on December 01.
With today’s rally, the index has shot up by 2% in just four trading sessions. Among individual stocks today, Yes Bank led the rally with a surge of 3.7% to the day’s high of 22.27 apiece, while Union Bank and IndusInd Bank surged 2% and 1.5%, respectively.
Other stocks such as Punjab National Bank, ICICI Bank, Bank of Baroda, State Bank of India, and HDFC Bank also traded higher, with gains of over 1%.
The rally also supported the front-line indices, boosting the Nifty 50 and Sensex, each with a 0.60% gain.
On Thursday, three banks, South Indian Bank Ltd., Indian Bank Ltd., and Punjab & Sind Bank, released their December quarter business updates. Indian Bank’s numbers came in higher than their guidance, while Punjab & Sind Bank’s results were within the guided range. South Indian Bank’s third-quarter update was mixed, as reported by CNBC TV-18,
Meanwhile, system credit growth has improved. As per the latest fortnightly data (15th Dec 2025), system credit growth rose to 12% YoY (vs. 11.5% YoY on 28th Nov 2025), while deposit growth moderated to 9.4% YoY (vs. 10.2% YoY on 28th Nov 2025).
RBI’s sectoral credit data for November 2025 indicated an uptick in overall system credit growth to 11.4% YoY (from 11.1%/10.2% YoY in Oct/Sep 2025), led by stronger momentum across industry, retail, and services, according to domestic brokerage firm JM Financial.
In addition, the RBI’s recently released bi-annual Financial Stability Report (FSR) points to improving trends in headline asset quality numbers across India’s financial sector.
