Traders have shifted to bullish positions on Indian banks following measures by the Reserve Bank of India to allow foreign currency borrowing. Bank Nifty rose 4.25 percent last week, outperforming the broader Nifty index.
The move comes as lenders benefit from the central bank's foreign currency borrowing initiative, known as FCNR(B). Market participants are reversing earlier bearish bets and adding fresh long positions in bank stocks and derivatives.
Analysts said the upward momentum is supported by short covering and new buying interest. They expect the trend to persist in the near term.
Bank Nifty's outperformance highlights renewed confidence in the sector amid the policy support.
