Indian Banking Stocks Gain Momentum With Rising Open Interest, Appealing Valuations

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(Bloomberg) — Before the trading day starts we bring you a digest of the key news and events that are likely to move markets. Today we look at:

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Good morning, this is Savio Shetty, an equities reporter in Mumbai. Earnings and trade developments are likely to dominate price action in Asian markets on Tuesday after MSCI’s gauge of global equities climbed to a record. At home, two Adani Group companies — Adani Green Energy and Adani Total Gas — are among those reporting results. The Nifty’s advance in Monday’s session means it is now less than 1% away from its all-time high. The gauge is likely to get there should this month’s momentum in foreign inflows continue. Global funds, which sold more than $9 billion worth of local shares on a net basis in the previous three months, have bought $1.3 billion this month through Oct. 24.

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Top court verdict boosts telecom sentiment

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The Supreme Court’s decision allowing India’s government to reassess its demand for billions in past dues from Vodafone Idea Ltd. boosted the operator’s shares and lifted sentiment across telecom-related stocks. Greater clarity — and the prospect of a one-time settlement — could finally remove a major overhang on the industry, improving access to funding and supporting continued network investments. The ruling also supports banks by easing long-standing credit concerns tied to the sector. Bharti Airtel hit a record high, while Indus Towers climbed nearly 3%.

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State-run banks could benefit from more FDI

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Another cohort that could benefit from a potential policy change is state-run banks. Local media reports say India may more than double limits on foreign direct investment in state-run lenders, citing unidentified sources. If approved, the move would likely boost valuations and improve access to capital. A gauge tracking these stocks is already among this year’s best-performing sectoral indexes, and momentum could accelerate if the proposal progresses. Regulators appear increasingly open to overseas investment in the long-protected banking sector, with global lenders including Dubai’s Emirates NBD and Japan’s Sumitomo Mitsui Banking eyeing stakes in local banks.

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Tractor sales in top gear 

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While some sectors are looking to favorable policies, one industry is already starting to reap rewards of a recent change. The local tractor market is witnessing a demand revival, with sales jumping almost 20% in the first half of the fiscal 2026. The government’s recent tax reduction and plentiful rains are powering demand, according to Systematix analysts. Growth is strongest in lower-horsepower tractors that offer cost efficiency and versatility. Rising sugarcane cultivation — supported by ethanol-focused policies — is also adding momentum. Mahindra remains the top listed beneficiary, with shares up 20% this year and on course for a sixth straight double-digit annual gain.

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Analysts actions:

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Three great reads from Bloomberg today:

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And, finally.. 

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India’s banking stocks are gaining momentum, supported by rising open interest and appealing valuations. Despite the recent strength, the Nifty Bank Index’s price-to-book ratio remains below its five-year average, suggesting more room to run. As policies ease and capital flows improve, financials could anchor a year-end market surge.

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—With assistance from Alex Gabriel Simon and Ashutosh Joshi.

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