India state banks' index rises for 2nd straight week on earnings optimism

Bank of Baroda

20/02/2026 07:35

** Indian state-run banks .NIFTYPSU rise 1.3% and are up 5.7% this week

** Set for biggest gains among major sectors, aided by optimism around strong earnings and benign asset quality

** This week, shares of State Bank of India SBI.NS up 1.16%, Bank of India BOI.NS gains 6.4%, Canara Bank CNBK.NS up 8.5%, while Punjab National Bank PNBK.NS gains 9.32%

** Macquarie says state bank stocks have seen sharp re-rating over the past six months; notes SBI up ~45% versus largely flat Nifty 50 .NSEI

** Brokerage says foreign investors appear to be rotating into PSU banks; foreign holding in SBI rose to 10.34% in December 2025 from 9.33% in June

** Adds further valuation re-rating may be difficult from current levels as gap with private banks narrows

** YTD, banks' index up 11.4% vs Nifty 50's 1.81% drop

 (Reporting by Surbhi Misra in Bengaluru)

 ((Surbhi.Misra@thomsonreuters.com |  X: https://twitter.com/SurbhiMisra_  |;))