770-Point Bounce in Bank Nifty as HDFC Bank and Yes Bank Rally

Bank Nifty bounced back by around 770 points from its intraday low on September 11 and almost touched the flat level after sliding up to 1.4% in the early part of the trading session. 

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

This bounce occurred amid rallies in HDFC Bank and Yes Bank while several public sector banks kept on coming under pressure. Around 2 pm, Bank Nifty was hovering around 56,471. 

Crude oil prices too eased off their intra-day highs after the oil price rally put pressure on the markets in the beginning of the trading session. 

HDFC Bank, Yes Bank Trade Higher 

HDFC Bank was up nearly 1% at ₹700.45 after touching ₹701.70 during the session. Yes Bank gained 6.2% to trade at ₹23.69. 

PNB was marginally higher at ₹117.35, while Kotak Mahindra Bank gained 0.35% to ₹418. Axis Bank was also trading slightly higher at ₹1,247. 

The picture remained weaker among several other banking stocks. IndusInd Bank was down 1.9% at ₹974.50, while SBI fell 1.4% to ₹995.50. Canara Bank and Federal Bank declined 0.9% and 0.8%, respectively. IDFC First Bank, Union Bank of India and Bank of Baroda were also trading lower. 

This difference was reflected in the banking indices, with Nifty Private Bank up 0.25% while Nifty PSU Bank remained 0.68% lower. 

Crude Oil Falls Back from Recent High 

Crude oil had risen to a four-month high of $109.97 per barrel before falling back below $106. The West Texas Intermediate of crude oil in the US too fell to about $101. 

This was after reports by Financial Times that the foreign ministers in the Middle East region were nearing an interim agreement with Iran for handling ships through the Strait of Hormuz. 

However, despite the news, the price of oil was significantly higher. The two benchmarks were up over 6% for the day and had gained over 10% for the week. 

The fall in crude oil price also came after a revival in Indian stocks. The Sensex rose more than 500 points from its intra-day lows while the Nifty rebounded by more than 150 points. 

However, at 1:57 pm, both the benchmarks were trading in the negative territory with the Sensex down 220 points to 74,682 and the Nifty down 94 points to 23,384. 

Broader Market Remains Under Pressure 

The recovery in Bank Nifty was not matched across the broader market. Nifty Midcap 100 was down 0.44%, while Nifty Smallcap 100 declined 0.67%. 

Market breadth also remained negative, with 2,494 shares declining against 1,405 advances. INDIA VIX rose 5.7% to 12.47. 

Global interest-rate concerns remained another factor for markets. US producer-price data released on Thursday had added to inflation worries, while the US 10-year Treasury yield moved towards 5%. 

Federal funds futures indicated a 72% probability of a Federal Reserve rate increase the following week, compared with 49% a week earlier. 

Bank Nifty’s recovery during the afternoon was led mainly by strength in select private-sector banking shares, while the continued weakness in PSU banks kept the recovery uneven across the sector.