Nifty PSU Bank Index Jumps Nearly 4% to Record High; Strong SBI Results Drive Rally

Shares of public sector banks saw strong buying interest, pushing the Nifty PSU Bank index up nearly 4% in intraday trade on the NSE. The index climbed to a new high of around 9,193, surpassing its previous peak touched in late January 2026.

Over the past month, the PSU bank index has risen about 7%, clearly outperforming the Nifty 50, which gained only around 0.5%. In the last 5 months, the sector index has jumped about 34%, compared with a 3.8% rise in the benchmark.

SBI Leads the Rally After Strong Q3 Results

The rally was mainly driven by State Bank of India (SBI), whose shares surged to a record high above ₹1,130 after reporting better-than-expected Q3 FY26 earnings. SBI posted a 25% year-on-year rise in profit to about ₹21,028 crore, supported by higher other income and lower provisions. Net interest income grew 9% YoY to ₹45,190 crore, while margins remained stable near 3%.

The bank also reported healthy loan growth of over 15% YoY and improved asset quality. Management raised FY26 credit growth guidance to 13–15%, signalling confidence in future performance.

Other PSU Banks Also Gain

Several other public sector banks moved higher along with SBI. Indian Bank, Bank of India, Bank of Maharashtra, and Central Bank of India posted solid gains, while Union Bank, Bank of Baroda, Canara Bank, PNB, Uco Bank, and Indian Overseas Bank also traded higher.

This broad-based buying helped lift the overall PSU banking index.

Also Read: Best 10 Blue Chip Stocks for February 2026!

Supportive Economic and Policy Environment

The broader outlook for banks is also improving. The RBI expects stronger GDP growth, supported by manufacturing recovery, resilient urban consumption, infrastructure spending, and improving corporate activity.
Higher growth expectations and stable interest rates could help bank margins and earnings remain healthy in the coming quarters.

Conclusion

The sharp rise in the Nifty PSU Bank index reflects strong investor confidence in public sector banks, led by SBI’s robust earnings and improved outlook. With supportive economic conditions and steady credit growth, the PSU banking sector may continue to remain in focus in the near term.

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