Bank Nifty Climbs Above 61,000 As BoB, PNB and Peers Rally Up To 4%; Key Levels To Watch

The Nifty bank index shot above the significant psychological level of 61,000 on trade on February 17, aided by widespread purchases in government sector banking shares. The index rose by approximately 0.5%, or more than 292 points, to reach 61,241.60 and thereafter trimmed some of the profit to the end of the session.

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This step has now made the banking index gain almost 2%, which is equivalent to approximately 1,055 points, in the past two trading days. The sudden rise and fall is an indication of interest by investors in banking counters, especially those that are state-run.

BoB, PNB And Other PSU Lenders Lead The Charge

Bank of Baroda and Punjab National Bank were the best in individual stocks. Both stocks surged up to 4 per cent to trade at ₹303.25 and ₹124.97 a share, respectively, at 2 pm.

Interestingly, two counters were not the only ones to be purchased. Union Bank of India increased by over 3% in the session, whereas Canara Bank recorded an increase of above 2%. The cross-border strength among various banks of the PSU assisted the index in maintaining a floor of more than 61,000.

The influx in these stocks is selective accumulation in the public sector banking space that has experienced periods of volatility over the past few weeks. The present upsurge is an indication of an uplift in the short-term mood in the industry.

Two-Day Gain Signals Momentum

The 2% increase in two sessions is an indicator of a short-run change of momentum in the banking index. The Nifty Bank index has added about 1,055 points during this time and was able to regain momentum and recapture a significant psychological mark.

It is, however, interesting to note that although the index surpassed 61,200 intraday, it still made some gains indicating that there is a possible supply at high levels. This implies that, as much as there is evidence of buying interest, the traders will be wary of aggressively pursuing prices.

The 61,000 figure is viewed as a technically important value because round-number prices tend to affect purchasing and selling habits, as well as short-term positioning.

Key Levels To Watch For Traders

According to the market players, the Nifty Bank index is likely to stabilise in terms of a wide band of 60,000-61,500 in the near future. The 60,000 mark is perceived as short-term assistance, and 61,500 can be one of the significant resistance areas.

Continued action above 61,500 would possibly be an opening to a higher rise in the banking pack. However, a fall below 60,000 can cause profit booking and result in short-term weakness.

There is a likelihood that traders will keenly follow the price movement at these points in order to understand the directional bias. As the new rally moves forward courtesy of PSU banks and the index records consecutive increases, the banking sector is in the spotlight. The move will not be sustainable unless there is a sustained purchasing interest and the market in general can sustain the higher levels in the forthcoming sessions.