Extending its rally for yet another session, Bank Nifty hit record high of 44,483 on Monday. According to stock market experts, strong Q4 results, US dollar retracing from its record highs and continuous buying by foreign institutional investors (FIIs) have together helped India banking sector to outperform other segments in recent sessions. They said that the uptrend may further continue as investors are getting active in mid-cap and small-cap segment.
Stock market experts said that after strong company results season, FIIs have gone bullish on Indian stocks as strong Q4 numbers indicate continuation of growth and demand in the national economy. They went on to add that this growth and demand would fuel credit growth of Indian banks and hence Bank Nifty may further continue its uptrend and hit 46,000 levels in short term time horizon.
Speaking on Bank Nifty outlook, Sandeep Gupta, Senior Grp. VP & Head of Dealing & Advisory – Broking & Distribution at Motilal Oswal said, “Bank Nifty has been the biggest outperformer in recent months as good buying interest is seen across financial stocks. The Index made a new all-time high of 44,483 mark today, compared to its previous high of 44,151 made in December 2022. Earning momentum continued for Banking stocks as most Banks reported strong results. Apart from further expansion in margins, asset quality too continued to improve. Loan book growth has been healthy across segments. The Index is witnessing a strong breakout and could see further momentum from hereon and the Index can now head towards 45000 to 46000 zones in coming sessions.”
On why Bank Nifty outperformed Nifty and Sensex today, Vaibhav Kaushik, Research Analyst at GCL Broking said, “After strong Q4 numbers announced by majority of Indian companies listed on Dalal Street, it has become clear that growth and demand is intact with the Indian economy. So, amid fear of economic slowdown in the US and lowering treasury yield, FIIs are expected to look at emerging markets like China, Brazil and India as Russia is facing sanctions while Europe is facing energy crisis after Ukraine war. As FIIs are skeptical about the Chinese market post-Covid and Brazil is facing political uncertainty, Indian stock market is an ideal choice for FIIs.”
On why Bank Nifty may continue its upside movement, Vaibhav Kaushik of GCL Broking said, “Initial movement in banking segment was fueled by large-cap banking stocks like HDFC Bank, ICICI Bank, Axis Bank, etc. However, now the focus has shifted towards low priced mid-cap and small-cap stocks like PNB, Bank of Maharashtra, Federal Bank, etc.”
Stocks to buy today
Vaibhav Kaushik suggested positional investors to take position in those banking stocks that have delivered strong Q4 results in FY23 and advised them to look at ICICI Bank, HDFC Bank, Kotak Mahindra Bank, Bank of Maharashtra and Punjab National Bank (PNB) shares.
After Bank Nifty, stock market experts are expecting Sensex and Nifty to it new highs ahead of US debt ceiling outcome. Sensex today is below 63,000 and is around 750 points away from its life-time highs of 63,583 while Nifty today is near 280 points away from its life-time high of 18,887.60 levels.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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