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Informist, Friday, Mar. 28, 2025

MUMBAI – Analysts are positive on banking stocks in the near term ahead of the expected policy rate cut in April. "The index is currently placed at around 50500 levels. There is still a way to go for the index. 53400 is the level we are aiming," Rishubh Vasa, a research analyst at Indsec Securities, said. Lot of statements from the Reserve Bank of India are contributing to the rally, he added. 

The RBI Monday issued revised guidelines for priority sector lending, which will come into effect on Tuesday, such as increasing housing loans limits for enhanced priority sector lending coverage, and expanded the purposes based on which loans are classifed under 'renewable energy'. "The enhanced coverage of the revised guidelines is expected to facilitate better targeting of bank credit to the priority sectors of the economy," the RBI said in the release.

During the week, Nifty Bank crossed 51000 levels and closed almost flat at 51564.80 points on Friday. Heavyweights such as HDFC Bank, Kotak Mahindra Bank, and ICICI Bank were the outperformers. Shares of Kotak Mahindra Bank rose nearly 4% to an over-three-year high of INR 2,162 on Monday after a series of appointments at the senior management level, and was the top gainer in the Nifty 50.

The rally in the banking stocks can also be attributed to these stocks being seen as safe right now because of the expectation of rate cut, so people are parking their money in this side, Anmol Das, head of research, Swyom Advisors Ltd., said. However, the volatility will be high next week due to Donald Trump's announcement of reciprocal tariffs on Tuesday, Das added. "Though the tariffs will not have any direct impact on the banking sector, overall market sentiment may weigh on the stocks". 

Asked about expectation of earnings, Das said loan growth may remain lower in Jan-Mar as well, especially for the public sector banks, which will see even slower growth than Oct-Mar. Deposit growth of the banking system lagged slightly behind loan growth, according to the latest RBI data. Loans extended by banks rose 11.1% on year as of Mar. 7, while deposits were up 10.2%.

"On the upside, 51850 and 52000 are key resistance levels, and a sustained move above 52000 could trigger further upside. Traders should maintain a 'buy-on-dips' strategy for Nifty Bank as long as index stays above the 200-DSMA support of 51000," Hrishikesh Yedve, technical and derivatives-research, Asit C. Mehta Investment Intermediates Ltd., said. According to analysts, RBI policy and announcement of Jan-Mar financial earnings are key things to watch out in the near term. 

TOP HEADLINES

* RBI revises priority sector lending guidelines, new norms to kick in Apr 1

* Bk loans to svcs sector down to 13% as on Feb 21 vs 21.4% a yr ago - RBI data

* RBI hikes cap on ATM cash withdrawal fee to INR 23/transaction from May 1
* Fin min may meet PSU bank heads Apr 3 to review fincl inclusion plans, NARCL
* ET: IndusInd Bank says reports of RBI asking CEO to step down "inaccurate"
* PRESS:SEBI probing into likely insider trading by IndusInd Bk's senior staff
* PRESS: RBI asks IndusInd Bank for root cause analysis on derivative losses
* RBI notifies special clearing operations Mon for govt's FY25 transactions
* RBI fines HDFC Bank INR 7.5 mln for breach of KYC norms
* RBI OKs Federal Bank's acquisition of 4% more stake in Ageas Federal Life
* Consumption-led credit supply continues to decline Oct-Dec: TransUnion CIBIL
* PRESS: IndusInd Bank to hire search firm to scout for new CEO
* Federal Bank signs binding MoU to raise stake in its life insurance JV by 4%
* Indian Overseas Bank gets demand notice of INR 5.59 bln from Income Tax Dept
* RBI fines Punjab and Sind Bank INR 6.82 mln for non-compliance
* Bk of India executes syndication agreement, to use $100-mln greenshoe option
* Kotak Mahindra Bank appoints Bhavnish Lathia as CTO
* RBI fines IDBI Bank, Citibank INR 3.63 mln each for violating FEMA norms
* Reuters: RBI urges IndusInd Bk CEO, deputy to leave once replacements found
* YES Bank receives INR 4.29 bln from trust in security receipts portfolio
* AU Small Fin Bank denies rumours about CFO resignation, RBI's special audit

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 Taniam Banerjee

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