Budget 2026: Banks Eye Capex, Fiscal Cues for Relief Rally Amid Rate Cut Fears

• Major banks like HDFC Bank, ICICI Bank, and SBI are in focus ahead of Budget 2026, with capex signals and fiscal cues being critical.
• The banking sector saw a rally in 2025 but lost momentum in early 2026 due to global trade tensions and mixed Q3 results.
• Economists expect RBI to pause rate hikes in February but may ease later in 2026, depending on Budget signals for borrowing and capex.
• The banking industry seeks growth visibility, credit flow support, and liquidity measures from Budget 2026, including capex-led corporate credit revival and MFI-NBFC credit guarantees.
• While rate cuts support growth, banks are focused on margin defense; sector fundamentals remain strong despite potential margin pressure from further rate cuts.

Why It Matters: Budget 2026's fiscal policy and capex plans are crucial for banking stocks, influencing RBI's rate decisions and market sentiment.