Bank Nifty Breakout Paved The Way For The 52,000-Mark, Says Analyst
The Nifty ended 0.96% higher at 22,635.05, and the Sensex rose 1.28% to end at 74,671.28.
The Bank Nifty reached an all-time high intraday and closed at 49,424.05 on Monday. "This has helped to open the doors for the 52,000 levels," said Hemen Kapadia, senior vice president of institutional equity at KR Choksey Stocks and Securities Pvt.
Earlier, when it broke its previous all-time high record, the Bank Nifty had fallen by 2,000 points, he said. “I was bullish last time, but it didn’t work out that well.”
The higher VIX Index has also remained a matter of concern, he said.
The Nifty PSU Bank also broke out during Monday’s session. Kapadia said there is a distinct upside left for PSU banks in the future. However, he added, “Maybe not in the same way or quantum we saw today."
AU Small Finance Bank Ltd. closed 6.52% higher at Rs 638.90 apiece. According to Kapadia, the bank has found “a shorter term as well as a medium-term bottom". The past three years have seen the bank move in a range-bound manner, he said. “So, from a longer perspective, the set-up and the technical structure will take time to play out.”
In terms of other small finance banks like Suryoday Small Finance Bank Ltd., Ujjivan Small Finance Bank Ltd. and Equitas Small Finance Bank Ltd., Kapadia said that though all of them are in different phases, “they look promising".
The Nifty settled 223.45 points, or 1%, higher at 22,643.40, and the Sensex rose 941.12 points, or 1.28%, to end at 74,671.28.
"An ease in Middle East tensions, coupled with stable earnings, is expected to maintain positive market sentiment. Moving forward, Fed policy and US non-farm payroll data will dictate the overall market dynamics," said Vinod Nair, head of research at Geojit Financial Services Ltd.
Aditya Shah, chief information officer at JST Investments Consulting Inc., considers the RBI's directive to Kotak Mahindra Bank Ltd. on issuing fresh credit cards and onboarding of new customers through online and mobile banking channels as a positive move.
This would push all the banks to invest in their IT systems as well as follow the regulations closely, he said. “The regulator is stringent, it has woken up from its past learning.”
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