Why Nifty Bank is surging despite sell off in Sensex and Nifty — explained
Stock market today: In early morning deals on Monday, Nifty and Sensex snapped its nine days rally after US dollar bounced back from its one year lows. However, Nifty Bank index held its upside curve and continues to remain in green territory. After around one and half hours of stock market’s opening bell today, Sense and Nifty are down to the tune of 1.25 per cent whereas Nifty Bank is up by near 0.15 per cent. Nifty Bank index is up after profit booking at the intraday high of 42,603 levels. So, the Nifty Bank index seems insulated from the profit booking trigger on Dalal Street after continuous nine days rally.
Speaking on the reason for Nifty Bank index holding is fort despite sell off in Nifty and Sensex in today’s deals, Avinash Gorakshkar, Head of Research at Profitmart Securities said, “Recent rally in Indian indices can be attributed to weakness in US dollar as Dollar Index touched its one year low of 100.80 levels. However, it bounced back from its one year low after hawkish statement by some US Fed officials on interest rate hike. However, US Fed has flagged of economic slowdown concerns due to bank crisis in the US and it is going to put domestic driven sectors in focus. So, we are expecting banking, auto, capital goods and real estate stocks to attract both DIIs and FIIs.”
Why Bank Nifty outperformed Sensex, Nifty?
Avinash Gorakshkar said that due to weakness in US dollar in last two weeks, FIIs have invested in Indian stock market and as banking and IT stocks have remained their favourite for years, Nifty Bank index is able to emerge strong among the three key benchmark indices on Dalal Street.
On why Nifty Bank is able to outperform Nifty and Sensex, Vaishali Parekh, Vice President — Technical Research at Prabhudas Lilladher said, “Bank Nifty outperformed the Nifty index on Thursday as well after closing strongly above the previous resistance zone of 42,000 levels and major frontline banking stocks like ICICI Bank, HDFC Bank, Kotak Mahindra Bank and Axis Bank are showing prominent improvement in their bias and further rise is anticipated in the coming days.”
Expecting Nifty Bank to continue outperforming Nifty and Sensex, Ravi Singhal, CEO at GCL Broking said, “I have been maintaining that Nifty Bank is better placed for a pull back rally than other indices as Nifty Bank’s swing high in recent times was around 41,850 that it has crossed and and sustained in the last nine days rally. Even today, Bank Nifty is able to sustain above 42,000 levels, which is a good sign for index listed stocks.”
Ravi Singhal of GCL Broking went on to add that swing high levels for Nifty is placed around 18,120 whereas swing high levels.
Stocks to buy today
On banking stocks to buy today, Ravi Singhal of GCL Broking said, “One can look at HDFC Bank and Kotak Mahindra Bank as these baking stocks are looking strong from both fundamental and technical perspective.”
Asked about which stock to buy today from banking space, Avinash Gorakshkar said, “In banking segment, ICICI Bank, Axis Bank and Kotak Mahindra Bank is my pick among private sector stocks whereas in PSU bank shares, my top picks are Bank of Baroda and State Bank of India (SBI).”
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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