The Nifty closed the week under pressure, declining 0.8% from Tuesday's high, extending its decline over preceding sessions. According to reports from The Financial Express, Friday saw FIIs cutting their index future long exposure by 5.5% to 26,129 contracts, while also boosting their index future short posture by 1.98% to 1,76,187 contracts. This ensured that the long-short ratio slipped to 12.9, though it remains far higher than levels witnessed in recent weeks. On a week-on-week basis, long contracts saw a rise of 5.5%, while short contracts declined by 10.98%, marking the lowest weekly close since February 2026. The current positioning represents a shift from earlier weeks when FII long exposure was significantly higher, indicating a more cautious stance from foreign investors.
The Nifty PSU Bank Index emerged as the top performer, surging 2.05% to close at 8,817.5 today, significantly outperforming the Nifty 50's 0.15% decline. According to Business Standard, individual PSU bank stocks rallied strongly, with Punjab National Bank jumping 4.34%, Bank of Maharashtra rising 3.70%, and Union Bank of India gaining 2.47%. The index has demonstrated impressive momentum, adding 4.00% over the last one month and an impressive 25.00% over the last one year, contrasting sharply with the benchmark Nifty 50's 0.21% fall over the same period. The buying momentum was attributed to positive outlook on asset quality and expectations of benign credit costs in the near-term, with analysts citing strong loan growth and healthy NII growth momentum despite NIM pressure.
For the April to June 2026 quarter (Q1FY27), banks delivered a healthy 14% year-on-year earnings growth, led by lower provisions as operating profit growth was flat YoY. According to Kotak Institutional Equities, net interest income growth accelerated, led by strong loan growth but offset by higher net interest margin pressure. As reported by JM Financial Institutional Securities, coverage-universe advances accelerated to +17.3% YoY from +15.1% YoY in Q4FY26, narrowing the PSU-private growth gap to 1.7pp from 3.2pp - the tightest in eight quarters. The brokerage expects this gap to invert by Q3FY27, with credit growth remaining healthy but moderating to around 15-16% for FY27. Analysts believe sector NIMs are likely near their troughs, with NIM pressure set to ease as banks replace expensive wholesale funding with incremental FCNR and retail deposits.
Railway public sector undertaking stocks experienced significant weakness on Friday, with the Nifty India Railways PSU Index trading 0.74% lower at 2,881.85 levels. According to latest reports, 15 out of 17 constituents declined while only 2 advanced, reflecting broader market weakness. Among major railway stocks, Indian Railway Catering and Tourism Corporation Limited (IRCTC) declined 1.32% to ₹497.80, Rail Vikas Nigam (RVNL) fell 1.85% to ₹226.30, and BEML dropped 1.43% to ₹1,883.30. Steel Authority of India (SAIL) was down 0.94% at ₹167.62, while Container Corporation of India (CONCOR) declined 0.17% to ₹532.65. Despite the current weakness, Indian Railways continues to show strong operational performance, with freight transport growing 1.46% to 419.08 million tonnes in Q1FY27, generating additional revenue of ₹430 crore.
All key Nifty sectoral indices showed mixed performance today, with the Nifty IT index sliding 1.54% while the Nifty Media index gained 1.05%. As reported by The Financial Express, only the Nifty PSU Bank and Oil & Gas indices stayed above their respective 5-day SMA, with the broader market showing selective weakness. The Nifty 50 declined 0.15% to close at 24,435.95 while the SENSEX fell 0.24% to 77,966.35. Among gaining sectors, autos have travelled the farthest from the 20 DMA, followed by IT and PSU bank, though Friday saw a turn lower in many indices. The prevailing trend remains positive across most sectors, though the recent pullback in some indices suggests selective profit-taking after the strong recovery.
