Bajaj Finance, Axis Bank, HDFC Bank Lead Financial Rally

Shares of leading banks and financial institutions surged on August 18, pushing benchmark sector indices into the green. Bajaj Finance, Axis Bank, and HDFC Bank gained up to 6%, supported by a positive S&P Global Ratings upgrade and optimism around GST reforms.

At around 10:10 am, the Nifty Bank index was up 1.3% at 56,035, while the Nifty Financial Services index advanced nearly 2% to 26,810, reflecting strong investor buying in the financial space.

Why Are Financial Stocks Rising?

One of the biggest drivers for the rally was the S&P Global Ratings upgrade. On August 15, the international agency raised ratings for seven major Indian banks — including SBI, ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank, Union Bank of India, and Indian Bank — along with three finance companies: Bajaj Finance, Tata Capital, and L&T Finance.

S&P noted that India’s financial institutions are well-positioned to benefit from strong economic growth, stable asset quality, and enhanced capitalization over the next 12–24 months. The agency also highlighted that credit risk in the system has reduced, boosting investor confidence.

Also Read: Sensex, Nifty Rally on GST Reform Announcement

Market Experts on the Upgrade

According to Motilal Oswal Financial Services, the S&P upgrade is a significant structural positive for Indian markets. It is expected to:

• Support incremental valuation expansion.

• Lower bond yields and risk perception.

• Improve foreign portfolio inflows into debt markets.

• Reduce borrowing costs for financial institutions, especially those raising funds abroad.

For instance, Indian financial companies like Bajaj Finance accessing the external commercial borrowing (ECB) market could see 15–20 basis points reduction in coupon payments, strengthening profitability.

Sector-Wide Impact

The rally was broad-based across banks and NBFCs, with Bajaj Finance, Axis Bank, and HDFC Bank leading the gains. The strong momentum in these financial heavyweights also provided significant support to the overall market indices.

With the S&P rating upgrade and GST reform optimism, analysts believe financial stocks may continue to attract investor interest in the coming sessions.

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