Nifty Bank rallies 5% after Iran‑US ceasefire
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- Nifty Bank rallied nearly 5% to 55,240, its highest level in nearly four weeks, after the Iran‑US ceasefire and temporary reopening of the Strait of Hormuz.
- IndusInd Bank shares rose more than 6% in the session, as did Union Bank of India and AU Small Finance Bank, each gaining over 6%.
- HDFC Bank gained around 4‑5% along with SBI and Yes Bank, contributing to a broader sector uplift.
- Foreign Institutional Investors cut their stake in HDFC Bank by 4% in March, which helped drive a March sell‑off where Nifty Bank fell 17% and Nifty PSU Bank dropped nearly 20%.
- VK Vijayakumar of Geojit said banking is now attractively valued after sustained FII selling, with credit growth healthy and little chance of near‑term rate hikes.
- Jefferies upgraded its overweight rating on banks, adding 3% points to holdings in SBI, HDFC Bank, and Axis Bank, citing low valuations, limited downside to earnings, and potential government support.
Why it matters: Investors benefit from the sudden 4‑6% price gains across major banks, while foreign investors who trimmed stakes in HDFC Bank in March see the sector rebound; the rally reflects lower oil‑price risk after the Iran‑US ceasefire, making banking stocks appear undervalued.
