south indian Shares of several mid-sized private sector banks, including South Indian Bank, AU Small Finance Bank, Federal Bank, and DCB Bank, surged up to 13% in Monday’s trading session. The rally came as investors showed renewed optimism toward India’s banking and financial services sector, driven by improving credit growth, stable asset quality, and robust quarterly earnings.
Analysts attribute the sharp rise to strong deposit accretion trends and expectations of improved net interest margins in the second half of FY26. The broader market sentiment also turned positive following foreign institutional inflows and upbeat guidance from leading private lenders.
South Indian Bank led the pack with double-digit gains, while AU SFB and Federal Bank followed closely behind. Market experts believe the trend indicates growing investor confidence in smaller and mid-tier banks that are showing consistent performance and improving profitability.
