Market Brief: PSU Banks & Metals Outlook **Banking Sector: The Valuation Gap** Public Sector Undertaking (PSU) banks continue to show strong momentum in early 2026. Despite a major rally over the past year, a significant valuation gap remains between state-owned lenders and their private sector peers. The Nifty PSU Bank index has outperformed the broader market recently, recording gains of over **2%** in single sessions this week. **Comparative Performance** State Bank of India (SBI) recently hit a market capitalization of over **₹11 lakh crore**, surpassing major IT firms. Its Price-to-Book (P/B) value has climbed to **2.41**, yet it still trades at a discount compared to private giants like ICICI Bank at **2.92**. Other PSU players like Union Bank and Bank of India have delivered year-to-date returns exceeding **15%**, driven by highest-ever quarterly profits and improved asset quality. **Credit Growth and Stability** Systemic credit growth for large PSU banks is projected at **13% to 15%** for the 2026 fiscal period. Gross Non-Performing Assets (GNPA) for lead lenders have stabilized near **1.57%**, with Capital Adequacy Ratios remaining robust above **14%**. This fundamental shift suggests the re-rating phase for public lenders is still active. **Metals: Structural Upcycle** The metals sector is navigating a long-term structural upcycle supported by global infrastructure demand and supply-side shifts. While the Nifty Metal index saw a brief **1%** dip this week due to global cues, the long-term outlook remains positive. Domestic demand in India continues to scale even during periods of global price volatility. **Commodity Trends and Prices** Industrial metals like copper have seen sharp movements, with companies like Hindustan Copper gaining over **15.5%** year-to-date. In the global market, Aluminum prices have faced corrections, sliding from **$3,116** to approximately **$2,995** per tonne in February. These fluctuations are viewed as natural consolidation phases within a larger bullish trend. **Precious Metals Context** Gold and silver have reached historic levels in early 2026. Gold is currently trading near **₹1,53,500** per 10 grams on domestic exchanges, while silver recently touched **₹2,35,206** per kg. Global analysts maintain high price targets for the year, citing central bank diversification and geopolitical risks as primary drivers. **Investor Strategy** Market sentiment remains constructive for both sectors. Selective entry into PSU banks remains favored due to their earnings visibility and narrowing discount to private banks. In metals, the "buy on dips" approach is prevalent, as supply-demand imbalances are expected to sustain prices throughout the 2026 calendar year.