Nifty Psu Bank

Among ETFs tracking the Nifty PSU Bank Index, Nippon India ETF Nifty PSU Bank BeES is the biggest fund with assets under management (AUM) of ₹4,078 crore. It is followed by Kotak Nifty PSU Bank ETF, while DSP Nifty PSU Bank ETF is the third biggest fund in the category.

PSU banks have underperformed their private sector peers, consistent with trends observed during previous market corrections. The Nifty PSU Bank index has dropped 16%, while the Nifty Private Bank index has declined 14.5% over the past month.

In the post-budget rally, the Nifty PSU Bank Index finished higher for the third straight week

Amid market volatility, the Nifty PSU Bank index rose 5.45% this week, reaching record highs. This growth reflects strong investor confidence, driven by solid earnings and a government spending push.

PSU banking stocks surged for the third consecutive session, with the Nifty PSU Bank index reaching a record high of 9,647. All 12 index constituents gained, led by Punjab National Bank. Strong earnings and credit growth underpinned the rally despite earlier market concerns over borrowing plans.

PSU banking stocks have shown strong performance in 2026, bolstered by positive earnings and credit growth. The Nifty PSU Bank index achieved 9,294, with SBI shares reaching new highs. Analysts expect core growth to balance treasury volatility amid elevated bond yields.

Higher-than-expected government borrowing may keep bond yields firm, impacting banks' treasury portfolios. However, PSU banks are better positioned to handle volatility due to stronger balance sheets and credit growth, cushioning earnings against treasury swings through FY27.

The Indian stock market faced challenges in 2025, underperforming Asian peers. Despite this, sectors like PSU banks and metals flourished, achieving strong rallies, while auto stocks rebounded from government policy changes.

PSU banks are leading the 2025 rally as NPAs fall to decade lows, RoE stays above 15% and valuations remain below 1x book. Investors can track banking ratios, peer data and screen PSU banks for free using the Finology Ticker screener.