PSU Bank Nifty Surges 1.48%, Bank of Maharashtra and Bank of Baroda Post Triple-Digit Gains on Robust Q4 Earnings

Market Sentiment Boosted by Strong Q4 Business Updates from PSU Banks

The Nifty PSU Bank index surged on Monday, rising 1.48% to 8,254.60, as robust Q4 business updates from major state-run lenders lifted sentiment.

Among individual stocks, Bank of Maharashtra led the gains, climbing 3.07% to Rs 65.85. Bank of Baroda advanced 3.00% to Rs 257.04, while Indian Bank rose 2.73% to Rs 893.10. Bank of India gained 2.46% to Rs 142.58 and Canara Bank added 2.17% to Rs 129.80. Punjab & Sind Bank also moved higher, up 2.01% to Rs 22.81.

The market rebound was also attributed to the bulls regaining control, with the Sensex rising 650 points and the Nifty surging above 22,900. Factors contributing to the market's recovery included hopes of a ceasefire between Iran and the US.

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According to Jefferies, loan growth for private banks remained steady and improved slightly for some public sector banks, supported by higher working capital demand. Quarterly updates from lenders pointed to steady momentum in business growth, with several banks reporting healthy expansion in advances and deposits.

Private sector lenders also showed resilience, with Axis Bank reporting 18.4% YoY growth in advances, while Yes Bank posted steady gains in both loans and deposits, alongside improvement in CASA ratio.

While quarterly earnings have been a key driver at the start of the week, the next major trigger for markets will be the outcome of the RBI Monetary Policy Committee (MPC) meeting, scheduled for April 8. According to a majority of economists, the MPC is likely to keep the benchmark repo rate unchanged at 5.25%, as rising geopolitical tensions and elevated crude oil prices continue to cloud the inflation outlook.

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Ongoing instability in West Asia has emerged as a significant concern for policymakers, pushing crude oil prices above $100 per barrel and heightening fears of imported inflation. Meanwhile, a weakening rupee, hovering near record lows, has added further pressure by increasing import costs across sectors and raising the risk of second-round inflationary effects on core prices.