HDFC Bank, YES Bank, SBI, ICICI Bank, Axis Bank, BoB rally up 6%, Nifty Bank nears 52-week high

Nifty Bank was merely 370-odd points short of its 52-week high as the banking gauge jumped more than 1,650 points, or 2.75 per cent, in Wednesday’s session. The de-escalation of geopolitical concerns and cooling crude oil prices have benefited rate-sensitive counters, particularly banking stocks.

During Wednesday’s session, Bank of Baroda led gains among the 14 constituents, soaring 5.8 per cent to Rs 275.31. Federal Bank Ltd and Punjab National Bank (PNB) advanced 5 per cent each. IDFC First Bank and AU Small Finance Bank gained 4 per cent each. Index heavyweights such as HDFC Bank, State Bank of India (SBI), Kotak Mahindra Bank and Axis Bank gained up to 3 per cent.

Nifty Private Bank index jumped over 650 points, or 2.2 per cent, to hit its 52-week high at 30,260.60. One should note that banking and financial stocks are considered to be FII favourite and overseas inflows in the Indian stock market bodes well for the financial counters.

Over the last month, Nifty Bank has jumped 11 per cent, thanks to a sharp rally across banking stocks. Among the heavyweight names, ICICI Bank Ltd led the gainers with a 17 per cent rise, while HDFC Bank was up 15 per cent. SBI and Kotak Mahindra Bank Ltd rose nearly 12 per cent each, while Axis Bank gained 7.5 per cent.

PSU banks were no exception. PNB surged nearly 19 per cent, while Union Bank of India was up 17 per cent. Bank of Baroda advanced more than 16 per cent, while Canara Bank jumped more than 11 per cent over the last month.

“The trend-deciding level for the day is 59,453. If Bank Nifty trades above this level, it may rally to 60,029, 60,317 and 60,892. However, if it trades below 59,453, we may witness profit booking in the market, and the index may correct to 59,166, 58,590 and 58,302,” Axis Direct said in its report.

“Nifty Bank has generated a breakout above the last four months’ broad range of 54,000–58,000, signalling strength and opening the way for an upside towards 61,000–61,800 in the coming weeks, as these were the previous major highs. Only the formation of a lower high and a lower low on the daily chart, along with a close below 59,000, will signal a pause in the current strong rally,” Bajaj Broking said.

“Immediate support is placed at 58,500–58,000. Short-term support has been revised higher to 56,500–57,000, given the confluence of key retracement levels from the current rally, last week’s gap area and the 200-day EMA,” it added.