Nifty Bank hits historic 60,114.05 level as Bank of Baroda, SBI, PNB lead gains; here’s what fuelled rally

The Nifty Bank index opened above the 60,000 mark for the first time at 60,102.05 on Monday, December 1. The index touched a high of 60,114.05—a historic level amid a positive market.

Apart from Nifty Bank, the equity benchmark indices SENSEX and NIFTY50 scaled fresh record highs at 86,159.02 and 26,325.80 in the opening session, respectively. The Nifty Midcap 100, however, touched a new record of the 61,308.70 level.

Since the beginning of 2025, the Nifty Bank index has gained nearly 18%, while on a one-year basis it is up 15%. Over the past month, the index has risen 4%, and it has advanced 8% over the last six months.

On Monday, the rally in the banking index was led by Bank of Baroda (2.04%), Kotak Mahindra Bank (1.44%), Punjab National Bank (0.84%), IDFC First Bank (0.70%), and State Bank of India (0.64%).

Other notable gainers included AU Small Finance Bank (0.58%), ICICI Bank (0.53%), Canara Bank (0.40%), HDFC Bank (0.18%), Federal Bank (0.17%), and Axis Bank (0.10%). IndusInd Bank was the sole loser, slipping 0.37%.

The rally comes ahead of the Reserve Bank of India’s December monetary policy meeting. While experts widely expect a 25 basis point (bps) rate cut amid easing inflationary pressures, some believe the central bank may opt to hold rates steady, given the stronger-than-expected GDP growth of 8.2% in the second quarter.

The Monetary Policy Committee meeting is scheduled from December 3 to 5, 2025. RBI Governor Sanjay Malhotra is scheduled to announce the decision of the rate-setting panel on December 5.

Earlier last week, RBI Governor Sanjay Malhotra had said that there is a space for a rate cut, and it was mentioned in the last bimonthly policy in October.

The optimism in the market was also supported by strong GDP data. The Indian economy recorded a six-quarter high growth of 8.2% in July-September, as factories churned out more products in anticipation of a consumption boost from the GST rate cut, according to government data.

As per data released by the National Statistics Office (NSO), the Gross Domestic Product (GDP) in the first half of 2025-26 worked out to be at 8%, up from 6.1% in the year-ago period.

Analysts at Nomura noted that the robust GDP figures set the stage for a “nail-biter” RBI policy meeting. Meanwhile, HSBC expects the central bank to begin easing policy rates in the December review, citing strong current growth that could moderate by the March 2026 quarter as fiscal support wanes and export momentum slows.

CLSA believes the RBI’s MPC may still opt for a cautious 25 bps rate cut this week, although the probability has reduced to 60% from 80% earlier.