New Delhi, Nov. 13 -- Shares of PSU banking stocks have emerged as hot picks among Dalal Street investors this week, turning the sector into one of the market's stellar performers, with several stocks posting double-digit gains. Better-than-expected second-quarter results, expanding credit demand and a revival in broader market sentiment have all supported the rally.

Extending its weekly winning run to a third consecutive week, the Nifty PSU Bank index advanced another 8%, marking its biggest weekly in seven months. Over the past three weeks, the index has gained a cumulative 15%, with the winning streak pushing it to its highest level since March.

Among individual stocks, Punjab National Bank emerged as the top performer, surging 13.3%...