India’s banking bulls are charging and they might just break the tape on Monday. Even as Nifty is still down around 9% from its peak, Nifty Bank index at 54,290, just a breath away from its 52-week high of 54,467.
Fueling the fire is a cocktail of favourable monetary cues, a drop in deposit rates from major banks, and improving investor appetite ahead of heavyweight earnings. HDFC Bank and ICICI Bank—two of the sector's biggest bellwethers—not only crossed their respective all-time highs on Thursday but are also poised to influence the next leg of the rally.
“Among the key sectors, the continued strength in the banking index has been crucial,” said Ajit Mishra, SVP of Research at Religare Broking. “It is now on the verge of hitting a new record high. The earnings of HDFC Bank and ICICI Bank are expected to provide important cues for the next market move.”
According to Mishra, the Bank Nifty is eyeing the 55,000–57,000 zone on the upside. “This move is supported by the consolidation phase seen over the last nine months. In case of any dip, the 51,900–53,400 zone is expected to offer strong support,” he said.
The price action, too, is sending a clear signal. Bank Nifty has been constructing a higher high–higher low pattern, a classic technical indicator of sustained momentum. More importantly, the daily RSI has surged past 70—indicating strong underlying buying pressure.
“The Bank Nifty rallied over 6% last week and also formed a long bullish candle on the weekly charts, which is broadly positive,” said Amol Athawale, VP–Technical Research at Kotak Securities. “As long as support levels at 53,500 and 53,100 hold, the uptrend is likely to continue. On the higher side, the index could move up to around 54,500–55,000, with further upside potential that might lift it to 55,300.”
Analysts say the sector's relative insulation from global volatility, strong credit growth, and benign asset quality trends have made banks a defensive-yet-dynamic play in the current market setup.
"Global uncertainties remain a concern, but Bank Nifty has emerged as a preferred investment choice, thanks to its strong fundamentals and improved margin outlook,” said a senior portfolio manager at a Mumbai-based fund house. “Rate-sensitive sectors like banking are now getting re-rated.”
Some are betting the rally may have more legs, especially if earnings from the top lenders come in strong. “We expect the sector’s earnings to remain healthy on the back of stable NIMs and strong fee income,” said a banking analyst at a domestic brokerage. “Valuations are not stretched yet, particularly for the larger private banks.”
The sentiment is mirrored in positioning too. Trading desks report sustained inflows into bank-heavy index derivatives and sector-specific ETFs over the past week, reflecting rising institutional conviction.
As the Street braces for a crucial earnings week, the question now isn’t whether Nifty Bank can hit a new high—but whether it’ll stop there. All eyes are on the opening bell.
Fueling the fire is a cocktail of favourable monetary cues, a drop in deposit rates from major banks, and improving investor appetite ahead of heavyweight earnings. HDFC Bank and ICICI Bank—two of the sector's biggest bellwethers—not only crossed their respective all-time highs on Thursday but are also poised to influence the next leg of the rally.
“Among the key sectors, the continued strength in the banking index has been crucial,” said Ajit Mishra, SVP of Research at Religare Broking. “It is now on the verge of hitting a new record high. The earnings of HDFC Bank and ICICI Bank are expected to provide important cues for the next market move.”
According to Mishra, the Bank Nifty is eyeing the 55,000–57,000 zone on the upside. “This move is supported by the consolidation phase seen over the last nine months. In case of any dip, the 51,900–53,400 zone is expected to offer strong support,” he said.
The price action, too, is sending a clear signal. Bank Nifty has been constructing a higher high–higher low pattern, a classic technical indicator of sustained momentum. More importantly, the daily RSI has surged past 70—indicating strong underlying buying pressure.
“The Bank Nifty rallied over 6% last week and also formed a long bullish candle on the weekly charts, which is broadly positive,” said Amol Athawale, VP–Technical Research at Kotak Securities. “As long as support levels at 53,500 and 53,100 hold, the uptrend is likely to continue. On the higher side, the index could move up to around 54,500–55,000, with further upside potential that might lift it to 55,300.”
Analysts say the sector's relative insulation from global volatility, strong credit growth, and benign asset quality trends have made banks a defensive-yet-dynamic play in the current market setup.
"Global uncertainties remain a concern, but Bank Nifty has emerged as a preferred investment choice, thanks to its strong fundamentals and improved margin outlook,” said a senior portfolio manager at a Mumbai-based fund house. “Rate-sensitive sectors like banking are now getting re-rated.”
Some are betting the rally may have more legs, especially if earnings from the top lenders come in strong. “We expect the sector’s earnings to remain healthy on the back of stable NIMs and strong fee income,” said a banking analyst at a domestic brokerage. “Valuations are not stretched yet, particularly for the larger private banks.”
The sentiment is mirrored in positioning too. Trading desks report sustained inflows into bank-heavy index derivatives and sector-specific ETFs over the past week, reflecting rising institutional conviction.
As the Street braces for a crucial earnings week, the question now isn’t whether Nifty Bank can hit a new high—but whether it’ll stop there. All eyes are on the opening bell.
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