Bank NIFTY hits fresh record high, crosses 52,900 mark; private lenders lead

NIFTY Bank index, which comprises 12 large capitalised public sector and private banks, continued upmove for the second straight session on Wednesday, in sync with broader market, hitting fresh record high amid value buying by investors. The index gained as much as 0.57%, or 302 points, to touch a new record high level of 52,908.65, led by sustained rally in private bank stocks.

The rally in Bank NIFTY was in line with benchmark indices, with the BSE Sensex and NSE Nifty touching their respective new highs in early trade today. The 30-share Sensex rose as much as 430 points, or 0.55%, to hit a new life-time high of 78,483, while the broader Nifty50 gained 104 points, or 0.44%, to attain a new height of 23,825 level.

In the Bank NIFTY pack, the top performer was Bandhan Bank, which climbed over 2% in intraday trade today. The other private lenders such as IndusInd Bank, Federal Bank, Kotak Mahindra Bank, ICICI Bank, AU Small Finance Bank, IDFC First Bank, Axis Bank gained in the range of 1-2%. Bucking the trend, HDFC Bank shares were down marginally by 0.35%.

Meanwhile, the index heavyweight State Bank of India (SBI) along with other public sector lender Bank of Baroda, Punjab National Bank, rose higher by up to 1%.

ICICI Direct Research in a note says that the Bank Nifty continues to remain “flag bearer” for Nifty. “For today’s monthly expiry, the Bank Nifty is likely to trade with positive bias and move towards 53,000. Among banking stocks focus should remain on private banking stocks while PSU banks are expected to remain subdued,” it says in its technical report.

The domestic brokerage in its report says that the banking index has gained more than 3% last week while the headline index remained largely flat. Fresh buying among private sector names helped the banking index to outperform. “Despite the range bound move from the PSU names, Bank Nifty managed to close the week above 51,500 mark and it is likely to move further higher in the coming sessions with immediate support at 50,800 levels.”

The report notes that private sector heavyweights have witnessed some good covering last week while PSU space has been laggard. “We believe that PSU names may come into limelight in the coming sessions and lead the Bank Nifty to move towards 53000 mark.”

For benchmark Nifty, the agency expects the index to move higher with immediate support near 23200 levels. “For the day (today), we expect the current momentum to continue towards 23900- 24000 levels. On the downside, 23500 is expected to act as support.”

Meanwhile, Angel One in its technical report says that the benchmark index Nifty crossed above 23700 for the first time on June 25 and closed comfortably above it with a gain of around 0.78%, driven by strong performance in the banking sector. The brokerage has given Nifty target of 23900.

“The next target is 23900, representing the 127% retracement of the election result day panic fall, followed by the psychological level of 24000. On the downside, immediate support is at 23650, with strong support around the bullish gap at 23550. Traders should monitor these levels closely to plan their trades,” says Sameet Chavan, Head Research, Technical and Derivative - Angel One.

“While midcap stocks had been outperforming in recent sessions, they took a backseat as heavyweights led the charge. This pattern of sector rotation is expected to continue ahead of the monthly expiry and in anticipation of the upcoming budget,” he adds.

The analyst at Angel One suggested traders to stay agile, shifting focus between themes to capitalise on sector rotations.

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