Bank Nifty Outperforms Benchmarks, Ends Above 54,500 as Banking Stocks Rally

Bank Nifty broke away from the weakness in the broader market on September 30, ending comfortably above the 54,500 mark as buying in several banking stocks lifted the index. 

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The banking index closed at 54,633.05, gaining 373 points, or 0.69%, and snapped a two-session losing streak. The move stood out on a day when the Sensex and Nifty finished lower for the third consecutive session. 

ICICI Bank, Kotak Mahindra Bank, Union Bank of India, IndusInd Bank and Axis Bank supported the recovery, while weakness in HDFC Bank and State Bank of India limited some of the gains. 

Leading Gainers for ICICI Bank 

The Bank Nifty started the session at 54,175.90, nearly 85 points lower than its last closing. The sentiment shifted positively in the first half as buying increased in multiple bank counters. 

The Bank Nifty gained nearly 900 points from its intra-day levels to hit an intraday high of 55,135.50 but ended up losing some of its gains. 

One of the best gainers of the day was the ICICI Bank, which gained more than 3% and emerged as the top gainer of the Nifty 50. Union Bank of India and Kotak Mahindra Bank were some of the other bank stocks that made gains for the index. 

The HDFC Bank was one of the worst losers, declining by nearly 2% and dragging down the Nifty 50. 

Sensex, Nifty Finish Lower for Third Session 

The strength in banking stocks was not enough to lift the broader benchmarks. 

The Sensex surrendered its intraday gains and closed 48.78 points, or 0.07%, lower at 72,480.29. Earlier in the session, the index had climbed as much as 533.16 points, or 0.73%, to 73,062.23. 

The Nifty ended 95.75 points, or 0.42%, lower at 22,620.45. 

Firm crude oil prices, elevated global bond yields and foreign fund outflows weighed on market sentiment during the session. 

Key Levels Expected Going Forward 

Bank Nifty snapped its two-session losing streak and ended up 0.7%, according to Pabitro Mukherjee, Deputy Vice President-Research at Bajaj Broking. 

According to Mukherjee, a break above 55,135 can fuel the rally towards the 55,600-56,000 levels. On not doing so, he felt that it could consolidate in the range of 53,500-55,100 ahead of RBI monetary policy results next week. 

According to Mukherjee, the near-term support was expected to be seen in the 53,500-53,000 levels. 

According to Hitesh Tailor, Technical Research Analyst at Choice Broking, the index closed above the previous day’s high level after five sessions. 

Tailor kept the immediate support levels in 54,200-54,000, while resistance was seen in 54,900-55,000 levels. 

After two days of losses, the Bank Nifty recovered on September 30 and crossed above 54,500 levels. The next direction depends on whether the index can sustain the rally around the noted levels.