Market update | Nifty Bank nears all-time high; what is driving the rally?

Stock market update: Prior to this, Nifty Bank recorded a lifetime high of 44,151.80 on December 14, 2022.

Earlier this year, the index had touched its all-time low of 38,613.15 on March 16, 2023, image- Pixabay

Stock market update: Nifty Bank, the NSE index that comprises most liquid and large capitalised Indian banking stocks, may soon touch its all-time high, according to a Zee Business report. At the time of filing this report, the index was trading at 44,051.50. Prior to this, the Nifty Bank index recorded a lifetime high of 44,151.80 on December 14, 2022, and earlier this year, the index had touched its all-time low of 38,613.15 on March 16, 2023.

Nifty Bank, in today's session, traded 14 per cent higher from its all-time low Three key reasons behind the rally in Nifty Bank are:

Continuous improvement in the asset quality of banks;
Impact of strong results from banks - net interest margins (NIMs) – the amount of money that a bank earns in interest on loans compared to the amount it pays in interest on deposits– are at the highest level in many years;
Indian banks are performing better than global banks

According to Zee Business report, top gainers of the Nifty Bank since the index touched its last lifetime high are AU Small Finance Bank which rose 6.5 per cent, IDFC First Bank climbed over 6 per cent, Kotak Mahindra Bank gained 4.9 per cent, ICICI Bank rose 2.4 per cent and HDFC Bank rose 1 per cent.

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Conversely, the top losers of the Nifty Bank in this period were Punjab National Bank which fell 17.3 per cent, Federal Bank declined 7.8 per cent, State Bank of India dropped 6.87 per cent, Bank of Baroda declined 4.5 per cent, Bandhan Bank dipped 3.8 per cent, IndusInd Bank declined 3 per cent and Axis Bank declined 2.7 per cent.