Nifty Bank up over 4% since Feb; analysts expect Bank Nifty to top 50k mark soon
Most banking stocks witnessed significant buying activity on Wednesday, March 6, leading to a nearly one per cent increase in the Nifty Bank index.
Nifty Bank closed the day at 47,965.40 with a gain of 384 points, or 0.81 per cent. Nine stocks ended higher in the index while only three stocks – Bandhan Bank (down 1.49 per cent), AU Small Finance Bank (down 0.66 per cent) and SBI (down 0.03 per cent) – ended lower.
Kotak Mahindra Bank (up 2.56 per cent), Axis Bank (up 2.11 per cent), Bank of Baroda (up 1.40 per cent) and ICICI Bank (up 1.01 per cent) closed as the top gainers in the index on Wednesday.
Lately, banking stocks have been experiencing strong momentum, serving as key contributors to gains in both their sectoral index and the benchmark Nifty 50. Since February, Nifty Bank has jumped over 4 per cent, outperforming the Nifty 50 which has gained over 3 per cent in the same period.
Stocks like SBI, Bank of Baroda and Punjab National Bank have jumped between 14-22 per cent since Feb.
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“A significant recent development is the liquidity in the banking system moving from deficit to surplus. This is positive for banks, particularly those which are facing constraints in raising deposits to match credit growth. The impact on the market would be the outperformance of Bank Nifty over Nifty 50,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
On the technical front, Nifty Bank is expected to hit a fresh record high soon and some analysts expect it to top the coveted 50,000 mark soon.
Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities observed that the Nifty Bank index remains under the influence of a bullish trend, approaching its all-time high levels with a marginal gap of 600 points.
“The ongoing bullish sentiment is evident, backed by a robust support zone established at 47,500-47,400, serving as a defensive line for the index. Anticipated to surpass its historical highs in the next few trading sessions, the Bank Nifty sets its sights on upside potential targets at 49,000/50,000 in the near term,” said Shah.
Jatin Gedia, a technical research analyst at Sharekhan by BNP Paribas expects the momentum in the Nifty Bank index to continue. He said dips towards 47,800 – 47,680 should be used as a buying opportunity as the index is likely to retest the previous all-time high of 48,636.
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Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 06 Mar 2024, 05:31 PM IST
