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Informist, Friday, Feb. 7, 2025

MUMBAI – Bank stocks are likely to be range-bound next week as there could be selling at higher levels, dampening the bullish momentum, analysts said. On Friday, the Nifty Bank fell 0.4% to 50158.85 points despite the Reserve Bank of India cutting the policy repo rate by 25 basis points to 6.25%. During the week, the index rose by 1.3%.

"On the downside, immediate support for the Bank Nifty is near 49,650, while on the upside, 50,600 will function as resistance. Traders should closely monitor these levels for potential opportunities. However, looking at weekly formation, the buy on dips strategy should be adopted in Bank Nifty," said Hrishikesh Yedve, assistant vice president, technical and derivatives research at Asit C. Mehta Investment Interrmediates.

The cut in repo rate was along the expected lines. The Monetary Policy Committee kept the policy stance unchanged at 'neutral'. The Nifty PSU index was the worst hit among the sectoral indices on Friday and closed 1.4% lower. The lack of any additional measures to boost liquidity in the RBI policy likely negatively affected the stocks. Some analysts believe liquidity will be tight in the coming quarter if additional measures are not taken. Bank of Maharashtra, SBI, Punjab & Sind Bank, and Bank of Baroda fell over 1.5-2.2%. 

Economists said that they expect the Reserve Bank of India to cut rates in the April Monetary Policy Committee meeting. "So the RBI's policy pivot was long due and in line with our expectations. While Governor (Sanjay) Malhotra suggested data dependence in his policy speech, we expect that this is the start to a deep rate cut cycle – we see another 75 bps of rate cuts in the pipeline this year," Aurodeep Nandi, India economist and executive director at Nomura said.

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* RBI Policy: Will act against entities mis-selling loans, says Malhotra
* RBI Policy: To introduce forward contracts in government securities
* RBI Policy: Bks should lend more funds in call mkt instead of parking in SDF
* RBI Policy: RBI to expand NDS-OM platform access to SEBI-registered brokers
* RBI Policy: To set up working group to review mkt trade, settlement timings
* Aim to maintain NIM at 3% even if RBI cuts rates by 25 bps, SBI Setty
* Earnings Review: SBI Oct-Dec net profit up 84% YoY, NPA provisions rise 31%
* Jammu & Kashmir Bank receives tax demand, penalty of INR 162.61 billion
* YES Bank infuses INR 1.49 bln in brokerage arm via rights issue
 

Following are the resistance and support levels for the stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:

End

Reported by Kshipra Petkar

Edited by Saji George Titus

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