⚡️ UPDATE: Saylor is pushing to keep Strategy in MSCI indices, per Reuters. https://t.co/zGrva7yxSF ...

Core Insights - The Nifty PSU Bank Index has increased nearly 20% since August, reaching a new 52-week high and a 46% rise from March lows, with the market capitalization of state-owned banks now at approximately Rs 18 lakh crore, driven by improving asset quality and renewed foreign interest [2][6] - Reports indicate a potential increase in the foreign institutional investment (FII) ceiling for public-sector banks from 20% to 49%, which could attract up to $4 billion in passive inflows, leading to a possible rally of 20-30% in PSU banks [3][4] - Major beneficiaries of the projected inflows include State Bank of India, Indian Bank, Bank of Baroda, PNB, Canara Bank, and Union Bank, with SBI expected to attract around $2,203 million [4][6] Market Performance - Indian Bank has delivered approximately 26% returns in the last two months, while Bank of India and Canara Bank have gained over 20% each; larger lenders like SBI, PNB, and Bank of Baroda have seen increases between 14-16% [2][6] - The overall market sentiment remains cautious, yet PSU banks have emerged as standout performers in 2025 [2][6] Foreign Investment Dynamics - The government is exploring direct foreign investment of up to 49% in state-run banks, with ongoing discussions between the finance ministry and the Reserve Bank of India [4][6] - As of September 30, foreign ownership in PSU banks varies significantly, from nearly 12% in Canara Bank to almost zero in UCO Bank [4][6] Analyst Perspectives - Analysts expect selective PSU banks to benefit from credit growth, particularly in retail, and improved margins due to lower cost of funds [5][6] - Chart patterns indicate potential for new record highs, although some banks are trading below crucial moving averages [5][6] - Caution exists regarding the sustainability of the current momentum, with some analysts predicting a slowdown in FY27E due to factors like treasury income drop and high operational expenditure growth [6]