Banking stocks have benefited from investors seeking shelter in domestically-focused equities due to uncertainty surrounding U.S. tariff policies, while analysts have also highlighted strong performance during the earnings season.

"Financials are once more the key differentiator, with strong results across the board, accounting for three quarters of the upside surprise," strategists at BofA Global Research said.

"Given financials' outsized share in index earnings, better-than-expected quarterly earnings for the sector has helped to lift consensus estimates for the market overall by 5% since mid-July."