Nifty Bank Falls Over 11% Since West Asia War; SBI And HDFC Bank Lose Over ₹1 Trillion Each

The Nifty Bank index has declined 11.2% over the past two weeks amid escalating geopolitical tensions in West Asia, with several banking stocks recording sharp losses during the period, according to data compiled by Ace Equity.

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The index, which tracks 14 listed banks, has dropped 6,772 points during the period. On March 16, the index attempted a recovery after three consecutive sessions of decline, touching an intraday high of 54,170.50, up 0.7%.

However, the gains were not sustained. As of 11 AM, the index was trading 245 points lower, or 0.4%, at 53,535, with 13 constituent stocks in negative territory.

Market Capitalisation Declines For Major Banks

Several large lenders have seen significant erosion in market capitalisation since the beginning of the conflict.

Shares of State Bank of India declined 13% during the period, while the bank’s market capitalisation fell by ₹1.42 trillion. Its valuation dropped from ₹11.09 trillion on February 27 to ₹9.6 trillion by March 13, according to Ace Equity data.

Similarly, HDFC Bank recorded a decline of ₹1.08 trillion in market value during the same period. The bank’s market capitalisation decreased from ₹13.66 trillion to ₹12.57 trillion, while its share price declined by about 8%.

Other major lenders have also seen a decline in valuation. ICICI Bank saw its market capitalisation decrease by ₹887 billion, with its share price falling about 9%.

Meanwhile, Axis Bank recorded a reduction of ₹579.2 billion in market value alongside a 13.5% fall in its share price. Kotak Mahindra Bank has also shown a decrease of ₹480.9 billion in market capitalisation during the same period.

Performance of the Banking Sector

Banks have shown stable operating performance in the December quarter of FY26 despite recent volatility.

According to a report by Mirae Asset Sharekhan, the banking sector has shown a 10.5% increase in net profit on a year-on-year basis in Q3 FY26.

Public sector banks have performed better, with a 17.9 % increase in net profits on a year-over-year basis, while private sector banks have registered a 5.1 % increase.

The report further stated that the return on assets for the sector has been stable at 1.5 % sequentially over the quarter.

Credit Growth And Asset Quality

As per the report, the growth in credit in the banking sector has been strong at 14-15%. The banking sector has also experienced improvement in the area of asset quality over the last decade, with a substantial reduction in net non-performing assets.

The recent fall in banking stocks can be attributed to market volatility because of geopolitical events that affect global economic conditions.