. Data from S&P Global Market Intelligence show the combined market capitalisation of the top 20 listed banks rose to about Rs 55.7 lakh crore at end-Dec from an estimated Rs 51.5 lakh crore at end-Sept, implying a quarter-on-quarter increase of around 8.2%. This gain exceeded the roughly 4% rise in sensex over the same period, reflecting the banking sector's re-rating driven by improving demand and lending prospects. Seventeen of the top 20 banks posted increases in market capitalisation, with the median g ...

Market Performance - Equity benchmark indices Sensex and Nifty fell sharply by nearly 1 per cent, marking the fourth consecutive session of decline due to renewed concerns over potential US tariff hikes and widespread selling pressure in global markets [1][7] - The 30-share BSE Sensex dropped 780.18 points, or 0.92 per cent, closing at 84,180.96, with an intraday low of 84,110.10, down 851.04 points or 1 per cent [3] - The 50-share NSE Nifty tumbled 263.90 points, or 1.01 per cent, to settle at 25,876.85 [3] Sector Performance - Significant losses were observed in metal, oil & gas, and commodity stocks, exacerbated by ongoing foreign fund outflows [3] - Among the 30-Sensex firms, major laggards included Larsen & Toubro, Tech Mahindra, Tata Consultancy Services, Reliance Industries, Tata Steel, and Trent, while gainers included Eternal, ICICI Bank, Bajaj Finance, and Bharat Electronics [4] Geopolitical Factors - US President Donald Trump supported a sanctions bill that could impose 500 per cent tariffs on countries purchasing Russian oil, aiming to leverage pressure on nations like China and India to cease buying cheap oil from Moscow [6] - US Senator Lindsey Graham indicated that the legislation would provide the White House with "tremendous leverage" against countries such as China, India, and Brazil [6] Global Market Context - In Asian markets, South Korea's Kospi index increased, while Japan's Nikkei 225, Shanghai's SSE Composite, and Hong Kong's Hang Seng indices declined [8] - Brent crude, the global oil benchmark, rose by 0.75 per cent to $60.42 per barrel [8]

Group 1 - Nifty Bank index opened lower at 59,893 compared to the previous close of 59,991, currently trading at 59,950, down about 0.1% [1] - The advance/decline ratio is 4/10, indicating a bearish sentiment in the market [1] - IDFC First Bank and ICICI Bank are the top gainers in the Nifty Bank index, each up 0.5%, while Yes Bank is the top loser, down 1.7% [1] Group 2 - Nifty PSU Bank has decreased nearly 0.3%, while Nifty Private Bank is down nearly 0.1%, indicating underperformance of public sector banks compared to private banks [2] Group 3 - January expiry Nifty Bank futures opened at 60,110, down from the previous close of 60,171, currently hovering around 60,120, down 0.1% [3] - The futures contract is trading between support at 60,000 and resistance at 60,500, with uncertainty in the trend until these levels are breached [3] Group 4 - If the support at 60,000 is breached, Nifty Bank futures may fall to 59,700; if it breaks above 60,500, it could rise to 61,000 [4] - Key intraday levels to monitor are 60,000 and 60,250 [4] Group 5 - Trade strategy suggests going short if Nifty Bank futures fall below 60,000 with a stop-loss at 60,150 targeting 59,700; conversely, if it surpasses 60,250, a buy position is recommended with a stop-loss at 60,000 targeting 60,500 [5] - Supports are identified at 60,000 and 59,700, while resistances are at 60,250 and 60,500 [5]

Market Performance - Equity benchmark indices Sensex and Nifty declined in early trade on January 8, 2026, with Sensex down by 255.86 points to 84,705.28 and Nifty down by 65.9 points to 26,074.85 due to foreign fund outflows and concerns over potential U.S. tariff hikes [1] - Major laggards included Tata Consultancy Services, Asian Paints, Maruti, Tech Mahindra, Infosys, and UltraTech Cement [1] - Conversely, gainers included ICICI Bank, Adani Ports, Bharat Electronics, and Hindustan Unilever [2] Foreign Investment Trends - Foreign institutional investors sold equities worth ₹1,527.71 crore on January 7, 2026, while domestic institutional investors purchased stocks worth ₹2,889.32 crore [2] Economic Outlook - The Indian economy is projected to grow by 7.4% in FY26, maintaining its status as the fastest-growing major economy despite U.S. tariffs and geopolitical tensions [4] - This growth estimate surpasses the RBI's forecast of 7.3% and the government's initial projection of 6.3-6.8% [4] - However, the anticipated U.S.-India trade deal, crucial for India's sustained growth, is not forthcoming, which may hinder market performance despite strong economic fundamentals [3] Market Sentiment - Market sentiment remains cautious due to geopolitical tensions, tariff-related concerns, and ongoing foreign portfolio outflows, with both Nifty and Bank Nifty facing stiff overhead resistance [5] - U.S. markets ended mostly lower on January 7, 2026, reflecting broader market concerns [6]

Core Insights - Banking profitability is expected to remain stable in the third quarter due to falling deposit rates offsetting recent policy rate cuts and supporting net interest margins (NIMs) [10] - The Reserve Bank of India's (RBI) 100 basis points cash reserve ratio (CRR) cut is anticipated to ease liquidity and support bank margins, releasing ₹1.87 lakh crore of interest-free funds for the banking sector [10][3] - Credit growth for large lenders has exceeded the banking system's growth of 10% to 12%, indicating strong demand for loans [10] Banking Sector Performance - Analysts predict that profitability will improve due to sustained advances growth, higher fee income, and lower credit costs, despite a decline in the yield on advances (YOA) [10] - The loan-to-deposit ratios (LDRs) across the banking system reached an all-time high of 81%, highlighting a divergence between credit growth and deposit mobilization, which poses systemic risks [6][10] - Demand for loans is expected to be driven by fast-growing sectors such as MSMEs and mid-corporates, along with retail sectors like gold loans and vehicle finance [7][10] NIM Expectations - NIM outcomes are expected to vary among banks, with some like Axis Bank and Indian Bank likely to report declines, while others such as HDFC and Kotak Mahindra may see expansions [10][6] - The high LDR may force banks to either slow down loan growth or increase deposit rates, both of which could negatively impact banking profits [6][10]

Core Insights - The banking sector is experiencing robust loan growth, with RBI data indicating a nearly 12% year-on-year increase and a 4.5% quarter-on-quarter rise in banking system advances as of mid-December 2025 [1][21] - Key segments driving this growth include micro and small enterprises, services, and retail loans, with industrial credit also picking up significantly [2][21] - Despite steady loan growth, deposit growth is lagging, with system-level deposits increasing by 9.7% year-on-year, resulting in a credit-deposit ratio exceeding 81% [6][21] Loan Growth - Loan growth is expected to be around 11.6% year-on-year for the coverage universe in Q3, with banks like HDFC Bank, Axis Bank, and ICICI Bank anticipated to outperform the sector average [21] - Retail, MSME, and services loans are expected to lead the credit growth momentum, particularly among mid-sized and small finance banks [5][21] Deposit Trends - Deposit growth remains a pressure point for the sector, with banks increasingly relying on certificates of deposit and selective rate hikes to mobilize deposits [6][7] - Elara Capital notes that slower growth in low-cost deposits and higher credit-deposit ratios may limit the benefits of liability repricing in FY27 [7][21] Margin Stability - Net interest margins (NIMs) are projected to remain stable in Q3, aided by CRR cuts and deposit repricing, with most banks expected to see only marginal movements [9][10] - YES Securities anticipates a mild sequential decline in NIMs, clustering around a 5-basis-point drop, although loan spreads have improved due to sharper cuts in deposit rates [11][21] Fee Income and Operating Expenses - Fee income is expected to improve sequentially in Q3, driven by higher loan disbursements and stable business momentum, which should help offset weaker treasury income [12][21] - Operating expenses are likely to remain flat sequentially, as previous wage revisions and seasonal cost increases have been absorbed [12][21] Asset Quality - Asset quality is stabilizing, with a reduction in stress in unsecured lending, particularly in microfinance, and slippages expected to remain stable [13][21] - Provisions are expected to decline for several banks, reflecting better collections and lower incremental stress [14][21] Profitability Outlook - Q3 is anticipated to mark a turning point for earnings, with year-on-year profitability expected to improve for most banks, reversing the contraction seen in Q2 [15][21] - JM Financial estimates a net interest income growth of about 4.7% year-on-year, with large banks like HDFC Bank and ICICI Bank expected to deliver strong return ratios [16][21] Key Trends - Three clear themes for Q3 include sustained growth led by retail and MSME loans, stabilizing margins with repricing benefits, and improving asset quality reducing downside risks to earnings [18][21] - Investor focus is likely to remain on banks with strong balance sheets and diversified loan books as Q3 results are released [19][21]

Market Performance - Benchmark indices Sensex and Nifty ended lower for the second consecutive day, with Sensex dropping 376.28 points (0.445%) to settle at 85,063.34 and Nifty declining 71.60 points (0.275%) to end at 26,178.70 [1][2] - Heavy selling was observed in blue-chip stocks such as Reliance Industries, which fell 4.42%, and HDFC Bank, contributing to the overall market decline [1][2] Sector Performance - The services sector growth in India moderated in December, with the HSBC India Services PMI Business Activity Index falling from 59.8 in November to 58.0 in December, indicating the slowest rate of expansion since January [4][5] - Despite the slowdown, firms remained optimistic about growth prospects, although overall sentiment reached its lowest level in nearly three-and-a-half years [5] Institutional Activity - Foreign institutional investors sold equities worth ₹36.25 crore on January 5, 2026, while domestic institutional investors purchased stocks worth ₹1,764.07 crore [3] Global Context - U.S. President Donald Trump indicated potential tariff increases on India due to dissatisfaction with India's purchases of Russian oil, which may impact market sentiment [3][4] - In contrast, Asian markets showed positive performance, with indices such as South Korea's Kospi and Japan's Nikkei 225 ending significantly higher [6]

Market Performance - Benchmark indices Sensex and Nifty ended lower for the second consecutive day, influenced by heavy selling in blue-chip stocks such as Reliance Industries and HDFC Bank, alongside concerns over potential tariff increases from the US against India [1][4] - The 30-share BSE Sensex dropped by 376.28 points, or 0.44%, closing at 85,063.34, with an intraday low of 84,900.10, down 539.52 points or 0.63% [3] - The 50-share NSE Nifty declined by 71.60 points, or 0.27%, ending at 26,178.70 [3] Company-Specific Movements - Trent's shares fell by 8.62% after disappointing revenue growth in the December quarter [3] - Reliance Industries saw a decline of 4.42%, with other laggards including ITC, Kotak Mahindra Bank, InterGlobe Aviation, and HDFC Bank [4] - In contrast, ICICI Bank, Sun Pharma, Hindustan Unilever, and State Bank of India were among the gainers [4] Institutional Investment Trends - Foreign institutional investors sold equities worth ₹36.25 crore on Monday, following a brief pause in selling [4] - Domestic institutional investors, however, purchased stocks worth ₹1,764.07 crore [4] Economic Indicators - India's services sector growth moderated in December, with the HSBC India Services PMI Business Activity Index falling from 59.8 in November to 58.0 in December, marking the slowest expansion rate in 11 months [6] - Despite the slowdown, firms remained optimistic about growth prospects, although overall sentiment reached its lowest level in nearly three-and-a-half years [7]

FD interest rates: Before you lock your savings into a fixed deposit (FD) account, you must compare the interest rates offered by different banks. Typically, long-term FDs deliver a relatively higher return over their shorter counterparts. For instance, most banks generally give a higher interest rate on their 3-year FDs vis-à-vis 1-year FDs. But this is not a rule of thumb.Here, we list out interest rates offered by all the top banks – private as well as state banks on their 3-year fixed deposits so that o ...

Economic Outlook - Double-digit loan growth across most large banks indicates rising economic activity after a prolonged phase of single-digit growth, suggesting an economic pickup [1][13] - System-wide gross NPAs have fallen to multi-year lows, strengthening the investment case for large banks [5][13] Banking Sector - Axis Bank and Kotak Mahindra Bank reported strong Q3 updates, while HDFC Bank showed stable but unspectacular growth; Axis is considered attractive from a valuation standpoint [2][13] - Preference remains with large banks over smaller lenders due to historical asset-quality risks associated with aggressive lending by smaller institutions [6][13] - Preferred banking holdings include ICICI Bank, Axis Bank, State Bank of India, and IDFC First Bank, which may benefit from lower interest rates [13] Consumption and Retail - Caution is advised on high-valuation retail stocks, with expectations for Trent being high, making sustained 20%+ growth difficult [7][13] - FMCG companies like Marico and Britannia have performed well during the consumption slowdown, while stocks such as Dabur and Godrej Consumer Products could emerge as strong performers in the next one to two years [8][13] FMCG Sector - ITC faces challenges due to a sharp excise duty hike on cigarettes, which could hurt volumes and presents risks from illicit cigarette inflows; its non-tobacco FMCG business has yet to achieve meaningful profitability [9][13] Power Sector - Preference is for transmission, transformer, and power equipment companies over pure financiers or generators due to long-term risks in solar project financing [10][11][13] Automotive Sector - Market leaders in the automotive sector continue to outperform, making turnaround bets less attractive; Mahindra & Mahindra is highlighted as a strong position [12][14] - Commercial vehicles are seen as having better prospects than passenger vehicles within Tata Motors [14] Staples Sector - A gradual recovery in staples is expected after two to three years of weak demand, with potential for double-digit returns if consumer demand picks up and inflation eases [12][14]