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Informist, Friday, Aug 16, 2024

MUMBAI – The Nifty Bank index is expected to move range-bound next week, analysts said. Today, the Nifty Bank closed 1.6% higher at 50516.90 points on the National Stock Exchange. Except for Punjab National Bank, all other banks ended in the green today. During the week, the index was up by 0.06%.

"The Bank Nifty index also opened with a gap and, after some initial volatility, experienced strong buying interest, closing positively at 50,517. However, the index may encounter resistance near 50,805, where the 21-DEMA (double exponential moving average) is positioned. A sustained move above 50,810 could drive the index toward the 51,200-51,500 range," said Hrishikesh Yedve, a senior technical research analyst at Asit C. Mehta Investment Interrmediates Ltd, in a note.
  

The support for the index is seen at 49511.40 points while the resistance is seen at 51106.10 points.

"The banking sector modestly exceeded tempered expectations despite facing headwinds. However, challenges persist with sluggish deposit momentum exerting pressure on net interest margins and signs of moderation in the unsecured loan segment," Elara Securities said in a report today.

Kotak Institutional Equities said that valuations of banks are at reasonable levels. "We rule out re-rating in multiples for banks in the context of headwinds of (1) lower NIMs and (2) likely higher credit costs, given the growing delinquencies of pockets of unsecured personal loans," it said.

Nonetheless, brokerages do not see any negative triggers for the sector. Public sector banks have already seen some de-rating over the past month on worries about higher credit costs.

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Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:

End

Reported by Kshipra Petkar

Edited by Akul Nishant Akhoury

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