Why Are Banking Shares Soaring Today? HDFC Bank, ICICI Bank, Axis Bank Lead Nifty Bank Rally | Stocks to Buy Now!

Banking stocks have been rising in the stock market today, with shares of HDFC Bank, ICICI Bank, and Axis Bank showing significant gains. This increase follows positive business updates from private banks and speculation about a possible interest rate cut in the upcoming RBI Monetary Policy Committee (MPC) meeting.

The Nifty Bank Index performed much better than the other main indices, rising by 1.15%. In comparison, the Nifty 50 Index went up by 0.52%, and the BSE Sensex rose by 0.35%. Shares of HDFC Bank jumped 1.90%, while Axis Bank, IDFC First Bank, and State Bank of India (SBI) also saw over 1% growth.

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Why are banking shares rising?

According to stock market experts, there are two main reasons behind the rally in banking stocks:

1. Positive Q2 Business Updates: The business performance of private banks in the second quarter of FY25 has exceeded expectations, boosting investor confidence in the banking sector.
2. Interest Rate Cut Expectations: There’s speculation about a potential interest rate cut in the upcoming RBI MPC meeting. This has encouraged buying activity, especially in private sector banking stocks like HDFC Bank, ICICI Bank, and Axis Bank.

Stock market expert Seema Srivastava, Senior Equity Research Analyst at SMC Global Securities, explained, “The rise in banking stocks is driven by strong Q2 business updates and hopes of a rate cut in the RBI MPC meeting.”

Adding to this, Anshul Jain, Head of Research at Lakshmishree Investment and Securities, said, “After the US Federal Reserve hinted at a rate cut during the Jackson Hole Symposium in September, the market expects the Indian central bank to follow suit with a 25 basis points (bps) rate cut. This is also pushing up the prices of private sector banking stocks.”

Banking stocks to buy today

For those looking to invest in banking stocks, Seema Srivastava suggested, “ICICI Bank and Axis Bank are good options in the current market.”