Extending gains to the fifth consecutive session, the Nifty Bank index, popularly known as Bank Nifty, closed above 44,000-levels for the first time on Wednesday. Analysts, in a poll, said the index could move up as much as 7% in the near-term over its close of 44,049.1 on Wednesday.
The index advanced 102.55 points, or 0.23%, from the previous close. Intraday, it made a new high of 14,151.8. The benchmark Nifty gained 0.3% to 18,660.3. Mirroring the gains, the Nifty Financial Services index also scaled new highs after rising for the fifth straight day. The index closed 19,466, up 56.15 points or 0.29%. The index made an intraday life-time high of 19,515.9.
Since the start of the year, the Bank Nifty has risen 21% while the Financial Services index has yielded close to 10% returns. A mix of improving underlying factors — credit growth, expansion in margins, healthier balance sheets and asset quality besides attractive valuations – amid a rising interest rate cycle — have attracted investor interest, analysts said. ET spoke to analysts on the road ahead for Bank Nifty.
RAJESH PALVIYA
VICE PRESIDENT, TECHNICAL AND DERIVATIVE RESEARCH, AXIS SECURITIES
Bank Nifty is forming higher top higher bottom formation on daily and weekly charts. This indicates sustained uptrend and above all the important moving averages. Chart pattern indicates Bank Nifty may scale up towards 44,600-45,000 in short-term. However, any minor dip towards 43,800- 43,400 will be a buying opportunity in the near-term. Both PSU and private banks are looking attractive and we expect bullish momentum to continue.
Top picks: , , and
GAUTAM SHAH
FOUNDER & CHIEF STRATEGIST, GOLDILOCKS PREMIUM RESEARCH
The momentum for Bank Nifty and banking stocks remain strong. The sector has overcome legacy issues of credit growth and bad asset quality. Banks and fi nancials have led the current market rally and the index has room for further upside. From a technical viewpoint too, we do not see any headwinds. The Bank Nifty can test 44,500 by December-end and rise to 46,000 over the medium-term (three months).
Top Picks: SBI, HDFC Bank and
SRIRAM VELAYUDHAN
VICE-PRESIDENT, IIFL
Bank Nifty price chart shows secular breakout on a longer time frame which has bullish implications (trendline that connects top to top on a monthly time frame since 2008). This, we believe, points towards a big shift taking place in the Indian banking space. The medium-term (two three month) target for Bank Nifty will be 46,300. Top Picks: HDFC Bank,
and SBI
KUNAL SHAH
SENIOR TECHNICAL AND DERIVATIVES ANALYST,
PSU Banks have led the recent rally in banking stocks and it’s now time for the private sector names to lead the next set of upmove. Bank mergers and consolidation has helped public sector banks clear their balance sheets over the last two years. The focus now remains on loan growth; and in a rising interest rate scenario, we expect banks to do well. With the US inflation data and Federal Reserve policy meeting pricedin, we see Bank Nifty touching 45,000 levels by December-end and further rising to around 45,700-levels over the next two months.
Top Picks: HDFC Bank, SBI, IndusInd Bank
CHANDAN
HEAD – TECHNICAL AND DERIVATIVES RESEARCH,
Bank Nifty has been making higher highs-higher lows on weekly scale for the last six weeks and continuing its week-on-week basis positive streak for the last 10 weeks in a row from 37,386 to recent life-time high of 44,151 levels. Major trend of the banking index is quite bullish even after the strong rally of around 18% in the last two-anda-half months. Implied volatility of banking index along with India VIX is gradually falling down to their multiple-month low which also suggests strong command of bulls in ongoing rally. As of now till Bank Nifty holds above 43,339, we are suggesting to use any small declines for buying opportunities for an upside target towards 44,444 and finally to 45,000 level by December end.
Top Picks: SBI, HDFC Bank, Axis Ban
