Bank Nifty crosses 57,000 mark for first time, here's what analysts say

Banking stocks continued their bull run on Monday enthused by RBI repo rate and CRR cuts on June 6. The euphoria around the banking stocks lifted Bank Nifty to a record high of 57,049 in early deals.The banking index crossed the 57,000 mark for the first time ever. The index touched record high for the second straight session on Monday. On Friday, the index hit a record of 56,695. 

The index has risen 2.3% or 1,289 pts in two sessions since the RBI announced a 50 bps rate cut on Friday. Cash reserve ratio (CRR) was cut by a huge 100 bps, easing a monetary limit for banks with the RBI, fueling hopes of a surge in lending process on reduced rates. 

On similar lines, BSE bankex rose nearly 1% or 621 points to 64,176 on Monday. Kotak Bank (3.17%), Federal Bank (2.57%), Canara bank (2.29%),  Axis Bank (2.03%) and IndusInd Bank (1.55%) were the top gainers on BSE bankex on Monday. 

Hardik Matalia, Derivative Analyst, Choice Broking said, "Post-policy, the index broke out of its consolidation range with impressive momentum and healthy volumes, indicating strong participation from market participants. This breakout has now pushed the index to new all-time highs, signaling a possible continuation of the ongoing bullish trend. The Relative Strength Index (RSI) is currently placed at 69.87, showing strong bullish momentum without yet entering overbought territory. This suggests that the index still has room to extend its gains. If Bank Nifty manages to sustain above the 57,000 level, it could move towards the immediate target zone of 57,500–57,800, while a positional move may stretch towards 58,500–58,900 in the near term. Overall, the technical setup remains positive, and a 'buy on dips' approach is advisable as long as the index holds above the crucial 56,000 level."

Ajit Mishra – SVP, Research, Religare Broking said, "The banking index finally broke out above the key hurdle of the 56,000 mark on Friday, after trading in a narrow range for over a month. We now expect it to move towards the 58,000 level, making this segment pivotal for the broader market direction. In the event of a dip, the 55,350–56,000 zone is likely to act as strong support. Interestingly, PSU banks and select midcap banking names are witnessing notable interest, while participation from private banking majors remains selective. Participants should align their positions accordingly."

Riyank Arora, Technical Analyst at Mehta Equities said, "Bank Nifty is trading near its recent highs, showing strong momentum ahead of the RBI policy event. The index has key resistance at Rs 57,000, and a decisive breakout above this level could trigger the next leg of the rally toward 57,500–58,000. On the downside, immediate support lies at 56,350 and major support at Rs 56,000. While the trend remains positive, we advise waiting for a sustained move above 57,000 for fresh momentum buys. Profit booking around these levels is possible, so traders should stay cautious and use trailing stop-losses to protect gains."

Om Mehra, Technical Research Analyst is bullish on the prospects of Bank Nifty. 

"Nifty Bank confirmed a decisive breakout from its month-long ascending triangle formation. This upward breach follows multiple failed attempts and finally clears the previous congestion zone with conviction. The index remains firmly positioned above all key moving averages. The daily RSI stands at 69, while the weekly RSI is at 68, reflecting sustained strength without entering overbought territory. The recent bullish divergence on the RSI lends further credibility to the move. Meanwhile, the MACD has triggered a fresh crossover above the zero line, a structure often seen before extended directional rallies.

The Nifty Private Bank index has reclaimed the 28,150 mark, lending structural support to the breakout, while Nifty PSU Bank at 7,218 continues to consolidate, contributing through intermittent leadership phases. However, holding above the 56,100–56,200 breakout zone for Nifty Bank remains critical. A sustained move beyond 57,120 could open the path toward 57,700-57,900, aligning with the 0.618 Fibonacci projection. However, a drop below the breakout base may lead to short-term mean reversion, offering a cleaner risk-reward setup for fresh entries. Overall, the trend in Nifty Bank remains firmly positive, as reflected in the Nifty Bank-to-Nifty ratio charts," said Mehra. 

Throwing light on the derivatives aspect of Bank Nifty, Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities said, "Options flow is turning decisively bullish. Near-the-money puts are being written aggressively, while call writers are shifting higher up the strike ladder, a clear early sign of a possible upward move. The 57,000 strike still carries the heaviest call open interest (42,264 contracts) and remains the immediate ceiling. On the downside, fresh puts have been seen added at 56,500, totaling 25,053 contracts, and at 56,000, which has carved out a solid support band. The Put-Call Ratio has jumped from 0.78 to 1.01 over the last two sessions, underscoring the sharp unwinding of bearish positions. Futures open interest is also expanding in tandem with rising prices, confirming long build-ups. Meanwhile, the India VIX, hovering near 14, reflects waning fear and growing optimism. Overall, the bias stays positive: as long as the index holds 56,300, dips should invite buying, while 57,050 is the next near-term hurdle."

Since the RBI cut its repo rate and CRR, four banks have trimmed their lending rates. 

UCO Bank trimmed both its MCLR (Marginal Cost of Funds-based Lending Rate) and RLLR (Repo Linked Lending Rate). The bank cut its RLLR by 50 bps to 8.30% from June 9 and lowered its MCLR by 10 bps across tenures. Its one-year MCLR now stands at 9%.

HDFC Bank, meanwhile, cut its MCLR by 10 basis points across tenure, starting June 7. With the reduction, the overnight and one-month rates are down by 10 basis points to 8.9%.

The state-owned Bank of Baroda (BoB) trimmed its Repo Linked Lending Rate (RLLR) by 50 basis points, in line with the RBI's latest repo rate cut. BoB's RLLR now stands at 8.15 per cent effective from June 7. 

Punjab National Bank (PNB) revised its repo-linked lending rate (RLLR) from 8.85 per cent to 8.35 per cent, with effect from June 9. However, its marginal cost of funds-based lending rate (MCLR) remains unchanged.