SBI, Axis, Kotak Mahindra rise up to 3%: Read why banking stocks are gaining today

9 Oct 2026 , 03:06 PM

Bank shares moved higher on Friday, October 9, as investors picked up stocks across the public and private sector. Federal Bank led the gains among the major lenders in the supplied market snapshot, rising nearly 3%. Kotak Mahindra Bank, Canara Bank and State Bank of India also traded in the green.

The rally came as Goldman Sachs raised its price targets on four banks. Investors were also weighing the RBI’s latest rate hike and what it could mean for lending rates, deposit costs and bank profits.

At 2:15 PM, Federal Bank traded at ₹330.40, up 2.93% on the NSE. Kotak Mahindra Bank gained 2.06% to ₹443.75, while Canara Bank rose 1.96% to ₹119.61.

Bank Stocks Today: Share Prices

Bank	Share price	Change
Federal Bank	₹330.40	+2.93%
Kotak Mahindra Bank	₹443.75	+2.06%
Canara Bank	₹119.61	+1.96%
State Bank of India (SBI)	₹956.95	+1.80%
Bank of Baroda	₹236.98	+1.28%
Axis Bank	₹1,259.60	+1.19%
Punjab National Bank (PNB)	₹116.57	+1.11%
ICICI Bank	₹1,355.50	+0.47%

Prices are based on the supplied NSE data as of 2:15 PM on October 9, 2026. HDFC Bank’s figures were not available.

Goldman Sachs Raises Targets for Four Banks

Goldman Sachs increased its price targets on Federal Bank, Axis Bank, SBI and Bank of Baroda. It kept its existing ratings on all four stocks.

Bank	Rating	New target	Previous target
Federal Bank	Buy	₹430	₹425
Axis Bank	Buy	₹1,500	₹1,477
SBI	Neutral	₹1,190	₹1,170
Bank of Baroda	Sell	₹250	₹245

The revised targets offer a mixed picture. Federal Bank and Axis Bank retained Buy ratings, while SBI remained Neutral. Bank of Baroda continued to carry a Sell rating, despite the increase in its target from ₹245 to ₹250.

A higher target does not automatically mean a more positive recommendation. The ratings show that Goldman Sachs continues to view the four lenders differently.

Why Are Bank Stocks Rising After the RBI Rate Hike?

RBI Raises Repo Rate to 5.50%

The RBI raised the repo rate by 25 basis points to 5.50% on October 7. It was the first increase since February 2023. The Monetary Policy Committee also moved from a neutral stance to calibrated tightening as inflation risks grew.

Rate hikes can put pressure on banks by increasing the cost of deposits and other funding. But the impact is not immediate or identical for every lender. Much depends on how quickly loan rates reset and how much banks need to pay depositors.

The RBI raised its FY27 GDP growth forecast to 7.1%, from 6.7%. A stronger growth outlook could support borrowing demand, though inflation and higher interest rates remain concerns.

No Additional Liquidity Measures

The RBI did not announce another cash reserve ratio increase or fresh liquidity-draining measures alongside the repo hike.

That was a relief for banks concerned about tighter funding conditions. System liquidity affects how much lenders need to compete for deposits and what they pay to raise funds. The absence of new measures may ease immediate pressure, but it does not remove the longer-term cost of higher rates.

Could Banks See Better Margins?

Comfortable system liquidity and strong mobilisation of FCNR(B) deposits are expected to help some lenders avoid raising domestic deposit rates too aggressively in the near term. Analysts estimate a possible improvement of 5–10 basis points in net interest margins for certain banks, depending on their asset mix.

NIM measures how much a bank earns from interest-bearing assets after paying interest on deposits and other borrowings. If loan rates rise before deposit costs do, margins can improve. If deposit rates catch up quickly, that benefit may shrink.

The outcome will vary from bank to bank.

Goldman Sachs’ Revisions Add to Buying Interest

The revised targets gave investors another reason to look at selected banking shares. Federal Bank and Axis Bank retained Buy ratings, while SBI and Bank of Baroda remained Neutral and Sell, respectively.

The market response, however, should not be confused with a sector-wide upgrade. Investors are still weighing individual lenders’ valuations, funding profiles and earnings prospects.

Stronger Balance Sheets Offer Some Cushion

Kotak Institutional Equities expects the current rate cycle to pose limited risks to banks compared with previous tightening phases. Its assessment points to stronger balance sheets, tighter underwriting and healthier borrower fundamentals.

These factors could help lenders absorb higher rates. But they are not a guarantee against pressure on earnings, particularly if deposit growth slows or borrowers struggle with rising repayment costs.

What the Repo Rate Hike Means for Banks

The effects will become clearer as lenders report their quarterly numbers. For now, investors have several factors to track:

• Loan rates: Loans tied to external benchmarks may become more expensive for borrowers as rates reset.
• Deposit costs: Banks could face pressure to offer higher rates to attract and retain deposits.
• Profit margins: The timing of loan and deposit repricing will determine whether NIMs improve or weaken.
• Credit growth: Higher borrowing costs could affect demand for housing, personal and business loans.
• Bad loans: Borrowers’ ability to repay will matter if financing costs remain elevated.
• Liquidity: Funding conditions could influence how aggressively banks compete for deposits.

The RBI’s higher GDP growth forecast is a positive for the broader credit outlook. Still, persistent inflation could keep monetary policy tight for longer than borrowers and lenders would prefer.

What Should Investors Watch Next?

The next set of bank earnings will offer a clearer picture of how lenders are handling the change in interest rates. Deposit growth and funding costs deserve particular attention. So do loan growth, bad-loan trends and management commentary on margins.

Friday’s gains are encouraging for banking stocks, but one session does not settle the outlook. The rally will need support from earnings and continued buying to last.

Conclusion

Federal Bank, Kotak Mahindra Bank, SBI and Canara Bank rose on Friday as investors responded to Goldman Sachs’ revised targets and assessed the likely impact of the RBI’s rate hike.

The immediate outlook for banks will depend on how lending rates and deposit costs move in the coming months. Some lenders may protect their margins better than others. For investors, the differences between individual banks matter more than the sector’s headline rally alone.

Disclaimer – The stock/s and indices mentioned in this article are discussed solely for informational and educational purposes. It should not be construed as investment advice or a recommendation to buy or sell any securities. The views and investment recommendations mentioned in the article are reported by investment experts, analysts, broking houses, rating agencies and other market professionals in their own capability and do not represent the views of Indiainfoline/IIFL Capital website or its management. Investors should conduct their own research or consult a financial advisor before making any investment decisions. Investments in securities markets are subject to market risks. Read all the related documents carefully before investing.