Bank Nifty falls 3% in
5 days: Should you
buy HDFC Bank,
ICICI Bank shares?

Story by: Harshita Tyagi
Designed by: Pragati

Amid the SVB collapse, Credit Suisse Bank crisis, Nifty Bank index lost Rs 1.33 lakh crore in three trading sessions between 10-14 March 2023. The index recovered marginally on Thursday, but has fallen 3.5% in the last 5 days.

Bank Nifty falls 3.5%
in 5 days

Impact of Wall Street's banks
on Indian banking sector?

The Indian banking system is very insulated from global headwinds, according to Suman Bannerjee, CIO of US based Hedge Fund Hedonova. “Indian banks don’t lend to foreign companies outside very selected Middle East companies. Net foreign lending is less than 4% of the lending book,” said Bannerjee.

India's banking sector will likely have a softer impact from the troubles at Credit Suisse, "Given the relevance of Credit Suisse to India's banking sector, we see softer adjustments in assessment of counterparty risks, especially in the derivative market," analysts said in a note.

Softer impact on
Indian banks

What Bank Nifty technical
chart suggests

Bank Nifty ended with a spinning bottom candlestick formation near the important support level of 38700. However, the 200-DMA of 39600 is an immediate hurdle. Above this, a short-covering move towards 40500 and 41000 levels is likely. If it slips below 38500, more selling pressure is expected towards 38000–37700 zone.

Prices are likely to correct a little bit more. The most important metric to watch out now is the net interest margin. When interest rates rise, the value of bonds falls, this can lead to losses if the net interest margin is narrow.

Will Bank Nifty
correct further? 

"What we are seeing right now in the broader markets is a bull trap. Prices will likely fall more, so I would wait a bit before accumulating banking stocks," said Suman Bannerjee, CIO, Hedonova.

Should you accumulate
quality Bank Nifty stocks?

According to price action theory, if the index breaches the 38,780 level, the next support level is seen at 37,875. Traders are advised to proceed with caution around 38,780 level. Investors can accumulate at around 36,000 level.

Analysts advise caution

Macquarie Research has an 'Outperform' rating on HDFC Bank, ICICI Bank, IndusInd Bank, City Union Bank and SBI stocks. Axis Bank, Kotak Bank and Bank of Baroda are rated Neutral by the international firm.

Which bank stocks to
buy amid slump?

The content in the story is for information purposes only. Investors or market participants should consult their financial advisors before taking any position


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