Nifty Bank Index Rises 0.88% to 58,221: AU Small Finance Bank, Federal Bank Lead Gains

The Nifty Bank Index ended Monday, October 20, 2025, on a positive note, climbing 507.80 points or 0.88% to close at 58,221.15. The index opened at 57,872.85 and touched an intraday high of 58,242.50. 

Market Breadth and Performance

The index showed a strong market breadth, with 11 out of 12 constituents advancing and only one stock declining. Nifty Bank currently trades at a P/E ratio of 16.05 and a P/B ratio of 2.17, near its 52-week high of 57,830.20. 

In terms of returns, the index gained 2.81% in the past week, 4.97% over the last month, and 11.75% over one year, while delivering an impressive 139.46% return over 5 years, highlighting steady long-term growth in the banking sector.

Top Gainers and Losers

Among the top performers, AU Small Finance Bank surged 7.86% to ₹854.70, Federal Bank jumped 6.92% to ₹227.07, and IDFC First Bank rose 6.84% to ₹76.80. Axis Bank and Punjab National Bank also saw gains of 2.44% and 2.04%, respectively. On the other hand, ICICI Bank was the only major laggard, falling 2.09% to ₹1,406.60.

Composition and Methodology of Nifty Bank

The Nifty Bank Index is composed of the 12 most liquid and large-cap banking stocks listed on the NSE. It is computed using the free-float market capitalisation method, providing a benchmark for the performance of India’s banking sector. Top-weighted constituents include HDFC Bank (28.49%), ICICI Bank (24.38%), State Bank of India (9.17%), Kotak Mahindra Bank (8.96%), and Axis Bank (8.78%). The index is reviewed semi-annually and serves as a base for ETFs, index funds, and structured products.

Sector Outlook and Fundamentals

The banking index has a dividend yield of 2.06% and maintains a strong correlation of 0.95 with Nifty 50, making it a reliable indicator of sector strength. With a five-year CAGR of 21.45% and consistent returns over various timeframes, the Nifty Bank Index reflects the financial sector’s stability and investor confidence.

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Conclusion

The Nifty Bank Index maintained its upward momentum, hitting fresh highs amid strong gains in mid-tier banks. With robust long-term returns, solid fundamentals, and steady performance across constituents, it continues to be a key driver of market growth.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.