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Informist, Friday, Mar. 7, 2025

MUMBAI – Analysts have a positive outlook on banking stocks in the near term as new set of durable measures were announced by the Reserve Bank of India this week to inject liquidity in the banking system. 

RBI on Wednesday declared government bond purchases worth INR 1.00 trillion via open market operation auctions in two tranches on Wednesday and Mar. 18. It will also conduct a dollar/rupee buy/sell swap auction of $10 billion for a tenor of three years on Mar. 24.

"They (RBI) have come out with liquidity measures, so that is positive. We feel that once this liquidity comes into (the system), banks will be able to transfer the rates, which will boost spending," Rishubh Vasa, research analyst at Indsec Securities, said. "Currently, Nifty Bank is in a negative zone. Somewhere down the line, it is stabilising. And if that remains, the key level to watch will be 48900," Vasa added.

On Friday, Nifty Bank closed 0.3% lower at 48497.50 points on the National Stock Exchange. During the week the index rose 0.32%. "As for the Bank Nifty, it is currently witnessing positive consolidation. For short-term traders, the double bottom support zone at 48,000 will act as a critical level. If it trades above this level, it could move up to the 50-day SMA (simple moving average), targeting 49,300 and 49,700. However, if it goes below 48,000, the uptrend would become vulnerable," Amol Athawale, technical analyst, Kotak Securities, said in a note. 

In addition, US President Donald Trump's decision to suspend the 25% tariffs on most goods from Mexico and Canada will continue to lift overall market sentiments, amid hopes of decelerating global trade tensions, analysts said.

While new liquidity infusion measures bringing a positive impact in the short-term, the overall banking sector will remain under pressure due to unfavourable macro environment and deposits are not picking up, which would, in turn, contribute to muted growth in next few quarters, said a research analyst, who is tracking banking sector. Deposit growth of the banking system lagged slightly behind loan growth, data released by RBI Friday showed. Banks' loans rose 11.0% on year as of Feb. 21, while deposits were up 10.3%.

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* RBL Bank appoints TS Pari as chief operating officer
* UCO Bank's Chief Technology Officer Sourav Dutta resigns
* Banks' loan growth to pick up on policy rate cut, liquidity easing - Fitch
* Nifty 50 valuation reasonable despite recent correction, says Minister Goyal

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 Christina Titus 

Edited by Deepshikha Bhardwaj

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