PSU bank stocks soar up to 8%, but HDFC, Axis and other private lenders fall up to 5% after Q2 results. Why the sharp divide?

ETMarkets.com

The Nifty PSU Bank index rose more than 2%, while the Nifty Private Bank index fell over 1%. The Nifty Bank index, meanwhile, traded marginally lower amid subdued market sentiment.

PSU bank stocks rally

Punjab National Bank (PNB) led gains among the PSU lenders, with its shares soaring 8% as brokerages hiked target prices after the bank’s Q2 earnings beat estimates. The lender on Friday reported a 13% year-on-year increase in standalone net profit to Rs 5,532 crore for the July-September quarter of the ongoing financial year 2027. Its net interest income (NII), which is the difference between interest earned and interest expended, rose around 11% YoY to Rs 11,601 crore in Q2 FY27, from Rs 10,469 crore in the year-ago period. Asset quality also improved.

Also read | PNB shares jump 8% after Q2 results beat estimates; Jefferies, Motilal Oswal, others raise target prices

The ruboff effect was seen in other PSU lenders as well. Canara Bank and Union Bank of India shares jumped over 3% each, while those of Bank of Baroda and Bank of India rose over 2% each. State Bank of India, Punjab & Sindh Bank, Bank of Maharashtra, Indian Bank and Central Bank of India shares rose around 1% each.

Private sector bank stocks tumble

In contrast, Axis Bank shares fell over 5% after the private lender reported a 38% year-on-year rise in standalone net profit to Rs 7,003 crore for Q2FY27, but missed analyst estimates.

The lender’s net interest income (NII) rose 12% YoY to Rs 15,371 crore, while net interest margin for the quarter under review stood at 3.36%.

Also read | Axis Bank shares fall over 4% despite 38% YoY jump in Q2 net profit. Why brokerages are revising target prices

HDFC Bank shares fell over 2% after India’s largest private lender reported a net profit of Rs 19,510 crore for the second quarter of FY27, marking a 4.6% jump from Rs 18,641 crore posted in the same period last year.

ICICI Bank shares, meanwhile, slipped over 1% after it reported a net profit of Rs 14,843 crore in the second quarter of financial year 2027, marking a 20.1% increase from Rs 12,359 crore posted in the same period last year. The lender's net interest income (NII) increased 17.7% YoY to Rs 25,339 crore, compared with Rs 21,529 crore in Q2 FY26, ICICI Bank said in a regulatory filing. Net interest margin or NIM stood at 4.18% in Q2 FY27, compared with 4.36% in Q1 FY27 and 4.30% in Q2 FY26.

Yes Bank shares also dropped over a per cent following its Q2 results. Other private lender stocks also dropped. Kotak Mahindra Bank, Bandhan Bank and IndusInd Bank shares fell nearly 1% each.

Technical view on Nifty Bank

Nifty Bank has dropped to 55,650 after a sharp uptick seen in the previous two sessions. The index witnessed an upward consolidation, indicating improving buying interest, said Vatsal Bhuva, Technical Analyst at LKP Securities. He added that the index has reclaimed its 20-DMA on the daily chart, while the RSI sustaining above 50 in a bullish crossover signals strengthening near-term momentum.

“Going forward, the index is expected to move towards its 50-SMA, indicating a potential mean-reversion rally. However, the 56,200 level could act as a resistance before further upside. On the downside, immediate support is placed at 55,200, followed by 55,000,” according to the analyst.

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