Indian banking stocks rallied on Friday, May 22, ahead of an extended public holiday weekend, led by gains at HDFC Bank, ICICI Bank and Axis Bank of up to 2 percent each.
The Nifty Bank index rose roughly 650 points after Reuters reported that the Reserve Bank of India is unlikely to raise interest rates primarily to defend the rupee, prioritizing inflation control instead. Banking shares are sensitive to rate expectations because they affect net interest margins and loan demand across the credit cycle.
The broader Nifty 50 traded about 0.7 percent higher despite Brent crude remaining near $105 per barrel amid Middle East conflict. Private lenders outperformed public-sector peers, with AU Small Finance Bank among the top gainers on the index.
Markets will close for multiple sessions over the holiday period, leaving investors to reassess global energy and geopolitical risks when trading resumes. Ten of sixteen major sector indices were trading in positive territory by mid-morning, according to exchange data.
Foreign portfolio investors sold Indian equities on the preceding Thursday session, making Friday’s bank-led rebound notable ahead of the holiday closure. The RBI’s next monetary policy committee meeting on June 5 will be watched for signals on whether inflation or currency stability takes priority in rate decisions.
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Sources:
https://tradingeconomics.com/india/stock-market