Banking shares gained for the fifth consecutive session on Wednesday, March 19, pushing the Nifty Bank index near the 50,000 mark. The bank index gained 388.10 points, or 0.79 per cent, to close at 49,702.60.
The rally was primarily led by AU Bank, which jumped 4.26 per cent, and Federal Bank, which gained 3.31 per cent. All the 12 banking stocks in the index ended in the green except Kotak Mahindra Bank, which slipped 0.59 per cent.
Punjab National Bank, Canara Bank, and Bank of Baroda gained between 2-2.5 per cent each.
Index heavyweights HDFC Bank (28.9 per cent weight) and ICICI Bank (24.69 per cent weight) also advanced 0.68 per cent and 0.47 per cent, respectively.
After correcting more than 12 per cent over the past five and a half months, Nifty Bank saw some respite with this rally. In the previous five gaining sessions, the index has recovered 3.86 per cent, however, it is still 8.75 per cent away from its all-time high of 54,467.35.
IndusInd Bank Gets Reassurance Boosts
IndusInd Bank, which holds a 4.9 per cent weight in the index, also gained 1.65 per cent to close at Rs 692.70 apiece on the NSE, gaining for the fourth day in a row. The private lender’s shares were battered 27 per cent in a single day last week after the bank’s internal review found an accounting discrepancy in its forex derivatives portfolio.
The rally in IndusInd bank shares came after Ashok Hinduja, Chairman of IndusInd International Holdings (IIHL), confirmed his support for the bank’s capital requirements. He also added that the current market conditions present a favourable opportunity to increase stake in IndusInd Bank.
Earlier on March 15, the Reserve Bank of India (RBI) had also reassured depositors of the bank’s financial health. The central bank, in a note, had said IndusInd Bank is “well-capitalised” and its “financial position remains satisfactory”. The central bank had also instructed the lender to take remedial actions by the end of this month, while ensuring complete transparency with its stakeholders.
Nifty Bank Eyes 50k
With the sustained five-day rally, the bank index is eyeing the psychological level of 50,000, which is just shy of 297.4 points, or 0.59 per cent.
According to Bajaj Broking Research, Bank Nifty formed a second consecutive strong bull candle on daily chart with a higher high and higher low, highlighting strength and extension of the up move.
Going ahead, the firm expects the index to maintain a positive bias and head towards 50,100 and 50,600 levels in the coming sessions. According to the firm, immediate support is placed at 48,800-49,000 levels, being the “confluence of key retracement of current up move and 20-days exponential moving average (EMA)”.
“Index in the last 9 weeks has been consolidating in the broad range of 47,700-50,600. Buying demand has recently emerged from the lower band of the range and we expect the index to head towards the upper band of the range placed at 50,600. We believe a breakout above the upper band will signal a major reversal of trend,” said the firm.
US Fed To Announce Interest Rate Decision Today
The US Federal Reserve is set to announce today (March 19) its first interest rate decision since President Donald Trump’s economic policies took effect.
With ongoing trade policy volatility and economic uncertainty weighing on the world’s largest economy, the central bank is widely expected to keep interest rates unchanged.
Earlier this month, US Fed Chairman Jerome Powell said at a New York research conference that the Federal Reserve is likely to keep its benchmark interest rate steady in the coming months, as it waits for the widespread uncertainty caused by Donald Trump’s policies.
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