Bank Nifty at a record high

MUMBAI : The Nifty Bank Index hit a record 41,840.15 on Thursday, surpassing its previous high, amid month-long buying abroad encouraged by an improving outlook. continuity in credit balance and asset quality, and falling bond yields.

Most analysts are optimistic about its continued performance for Nifty, which trades nearly 4% below its record high of 18,604.45 last October. Nifty Bank hit the previous record of 41,829.6 on October 25 last year.

Investor buying into major companies such as ICICI Bank and State Bank of India, which hit lifetime highs, boosted the index even as most stocks remained under pressure in the coming months. all day.

ICICI Bank raised a new intraday high of 936.65 before closing sideways at 917.6 on NSE, while SBI hits new intraday high at 578.5 before closing slightly green at 572.15 in a single day Nifty fell 0.7% to 17,877.

ICICI has the second highest weighting (24.34%) in the index of 12 banks after HDFC Bank (25.71%), while SBI ranks fourth (11.29%).

Banks have played a key role in Nifty’s recent rally from the June 17 low of 15,183.4. While Nifty was up nearly 18 percent from 17,877 on September 15, Bank Nifty was up 28 percent year-on-year to 41,209.2. Financial services has a share of 36.96% for Nifty, followed by IT (14.22%), oil and gas (13.41%), FMCG (8.75%) and automotive (6%).

A major part of the recent performance up to June could be attributed to the purchase of FII. NSDL data shows that equity assets under FPI supervision in financial services increased from $163 billion on June 30 to $190.6 billion on August 30.

Rajesh Palviya, vice president (research) and chief technical officer at Axis Securities, said Bank Nifty delivered a “breakout”, after consolidating in the 10,000-point range for the past 10 months. This suggests it could “crash at 44,000-45,000 in the medium term, with 39,000 likely to act as good support. FII buying is likely to continue after the sharp drop from last October to this June,” he added.

Siddarth Bhamre, head of research at Tonare Broking, said Nifty Bank “will continue to outperform at least in the near term, given the fact that India remains the far-better country in terms of growth. globally, is pegged at 6-7% this year, even as recession and growth concerns loom over the US and China. “

To be sure, ratings agency Moody’s cut India’s CY22 real GDP growth forecast of 110 bps to 7.7% earlier this month, citing rising interest rates, uneven monsoons and growth global slowdown. This is better than China’s 3.5% growth forecast.

ICICIdirect Research said that credit and performance growth is expected to continue, after sustained credit demand supported performance in Q1FY23.

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