Bank Nifty index hit a record high in the early trade on Monday led by strong buying in banking heavyweights. The index gained around 1% to hit an all-time high of 44,458.15, crossing its earlier level of 44,151.8, hit in October last year
All the constituents of the Bank Nifty were trading in the green led by IndusInd Bank, AU Small Finance Bank, Kotak Mahindra Bank, and HDFC Bank rising more than 1% each, followed by Bandhan Bank, Axis Bank, Federal Bank, SBI and Axis Bank gaining over half a per cent each
IndusInd Bank stock was the top gainer on the Nifty Bank as the stock surged around 2% to Rs 1,291.15 on Monday. It was followed by heavyweight counter HDFC Bank which gained about 2% to Rs 1,639.65 for the day
Nifty Bank has gained nearly 3% this year so far, and more than 23% in the last one-year period. In the last five years, the banking index has rallied more than 65%
The recent rally in banking shares was boosted by healthy Q4 earnings, better margin performance and improving asset quality. Healthy credit growth has also been a tailwind for banks in recent time
Bank Nifty closed the last week with a 0.06% gain. It formed a bullish candle on the weekly chart. On the daily chart, the index is sustaining above 50-EMA, which would be acting as an important support level, according to Sumeet Bagadia, Executive Director at Choice Broking. The RSI stood at the 63 level while the MACD was skewed on the positive side
"Among private banks, ICICI Bank and Axis Bank could be a front runner. In the PSU banking space, SBI, Canara Bank and Bank of Baroda may reveal some expansions this week," said Bagadia
Nifty Bank June futures traded with a 76-point premium. Nifty Bank Put options distribution shows that the 43,500 strike, followed by the 43,000 strike, have the highest open interest (OI) concentration, which may act as support for the current weekly expiry. Nifty Bank Call strike price of 44,500, followed by 45,000, witnessed significant OI concentrations and may act as resistance for this expiry
Nifty Bank has traded in a very narrow range in the past week, suggesting some indecisiveness among Call and Put writers. Simultaneously, the volatility index has been slowed down, which led to a shrink in premium price. Nifty Bank’s rollover stood at 78.41% against 81.67%. The key reason why Nifty Bank has remained underwhelming is the short build in HDFC Bank
A clear breakout over the 44,200 level can start a significant upward surge in Bank Nifty. The volatility index has been steadily declining this month and is now hovering at 12.52%. “Based on the statistics above, we can expect a quick sprint in VIX with a low India VIX, indicating a chaotic market," said Sumeet Bagadia, Executive Director at Choice Broking
"Bank Nifty momentum indicator RSI has also confirmed a positive crossover, reinforcing the buy signal. Traders and investors should closely monitor the index for sustained strength above 44,000 and consider the potential for continued upward movement based on the bullish momentum and buying activity observed," said Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities
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