Bank Stocks Outlook
Analysts bullish on Nifty Bank; MPC in focus next week
This story was originally published at 20:24 IST on 4 April 2025
Register to read our real-time news.Informist, Friday, Apr. 4, 2025
MUMBAI – Though Nifty Bank saw some downward movement this week, analysts are bullish on the index and expect it to breach 52000 levels in the coming week. The Nifty Bank index Friday closed 0.2% lower at 51502.70 points.
"The Nifty Bank outperformed and maintained a bullish stance. The index traded in positive territory, though it was marginally down by 62 points or 0.12%, closing at 51502.70 levels. The index is forming a base and is trading strongly above its 200 SMA levels," Brijesh Ail, head-technical and derivatives, IDBI Capital Markets and Securities, said in a note.
"The moving averages and oscillators indicate a bullish bias. For the upcoming trading session, a strong move above 52000 could generate momentum, allowing the index to test the 53000 mark. The weekly RSI (relative strength index) has triggered a positive crossover, suggesting underlying strength," Ail added.
The announcement of a liquidity easing measure by the Reserve Bank of India ahead of the policy meeting on Wednesday was a positive for the banking sector this week. The regulator Tuesday announced INR 800 billion worth of government bond purchases through open market operations in four tranches of INR 200 billion each. One such auction was held on Thursday.
"The RBI's aggressive liquidity easing measures suggest a strong intent on ensuring smooth monetary transmission as it continues on its rate easing path. Based on our estimates of muted 2025-26 (Apr-Mar) growth and a comfortable inflation trajectory, we continue to expect 25 basis points of rate cuts each in the April and June policies, accompanied by a stance change to accommodative. While global risks remain, we see room for an additional 25-50 bps of rate cuts if growth slowdown persists," Kotak Mahindra Bank said in a report.
Analysts said the market has already priced in 25-bps repo rate cut in the upcoming policy, and some expect a cut in cash reserve ratio of banks. If RBI lowers the CRR, it will be a positive for the sector, given the current liquidity and deposit challenges faced by the banks and market, according to an analyst with a brokerage firm.
Going ahead, the RBI policy meeting and corporate earnings will be in focus. Many banks announced quarterly updates this week, which showed deposit growth is trailing loan growth. Loans extended by banks rose 11% on year as of Mar. 21, while deposits were up 10.3%, according to latest RBI data.
"I think deposit growth is fairly stable, it is neither improving a lot nor slowing down but given that the market returns are sort of declining, would expect deposits to kind of pick up as a counterbalance," an analyst, tracking the sector at a brokerage firm said. He expects flattish earnings for the banks, with microfinance asset quality stabilising.
TOP HEADLINES
* Union Bank's global advances up 8.6% on year as on Mar 31, deposits up 7.2%
* PRESS: IndusInd Bank hired Big Four audit firms to review bank ops in 2024
* HDFC Bank's gross advances up 5.4% on year at INR 26.44 tln as of Mar 31
* Fin min, bks discuss strategy to improve deposit mobilisation FY26: Sources
* Bank of Baroda's global advances up 13% YoY as of Mar 31, deposits up 10.3%
* SBI, Citigroup announce $295-mln social loan facility for small farmers
* IDFC First Bank's loans up 20.3% on year as on Mar 31, deposits up 25%
* AU Small Finance Bank's gross advances up 25.8% YoY as of Mar 31
* PNB domestic loans up 13.2% on year as of Mar 31, deposits up 13.3%
* Bank of Baroda gets warning from bourses over delay in notifying RBI action
* Rating agencies optimistic on banking sector, see 12-13% credit growth FY26
* Bandhan Bk gets INR 1.2-bln partial claim payout under credit guarantee fund
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:
| Company | Price | Week-on-Week Change in % | Resistance | Support |
| AU Small Finance Bank | 552.1 | 3.30 | 567.40 | 537.10 |
| Axis Bank | 1091.30 | (-)1.00 | 1116.00 | 1063.10 |
| Bank of Baroda | 234.32 | 2.50 | 246.00 | 227.00 |
| Canara Bank | 90.39 | 1.60 | 96.70 | 86.50 |
| Federal Bank | 195.00 | 1.20 | 199.30 | 190.40 |
| HDFC Bank | 1817.30 | (-)0.60 | 1854.30 | 1792.60 |
| ICICI Bank | 1335.30 | (-)1.00 | 1348.40 | 1315.50 |
| IDFC FIRST Bank | 57.81 | 5.20 | 61.70 | 55.50 |
| IndusInd Bank | 682.00 | 5.00 | 716.80 | 658.30 |
| Kotak Mahindra Bank | 2131.95 | (-)1.80 | 2160.30 | 2104.00 |
| Punjab National Bank | 96.61 | 0.50 | 100.60 | 94.00 |
| State Bank of India | 767.45 | (-)0.50 | 789.70 | 753.90 |
| Nifty Bank | 51502.70 | (-)0.10 | 52118.80 | 51052.40 |
| Nifty 50 | 22904.45 | (-)2.60 | 23349.50 | 22635.00 |
| S&P BSE Sensex | 75364.69 | (-)2.70 | 76638.70 | 74603.60 |
End
Reported by Christina Titus
Edited by Ashish Shirke
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