Nifty Bank Down 2,000 Points, Erases Monday’s Gains; SBI, BoB Top Losers

The Nifty Bank index experienced a sharp decline, losing 2,000 points and erasing all gains made on the previous trading day. The decline comes amidst investor concerns over early trends in the Lok Sabha polls indicating a less favorable outcome for the National Democratic Alliance (NDA) than expected.

Key Highlights:

• Market Performance:
  • The Nifty Bank index opened with a 1% loss on June 4.
  • All 12 stocks in the index reported losses.
  • Major Public Sector Banks (PSBs) like State Bank of India (SBI) and Bank of Baroda (BoB) were the top losers, with each stock tumbling around 15%.
• Specific Stock Performance:
  • SBI: Declined more than 15%.
  • Bank of Baroda: Fell by approximately 15%.
  • Other banks such as Punjab National Bank, Axis Bank, ICICI Bank, HDFC Bank, and Kotak Mahindra Bank also reported losses up to 7%.
• Historical Context:
  • The Nifty Bank index had surged by 4.1% on the previous day, reaching 50,990 points, supported by strong performances from BoB, SBI, Axis Bank, and IndusInd Bank.
  • The index had crossed the 40,000 mark in October 2021 and took two-and-a-half years to achieve the 10,000-point journey to 50,000.

Technical Analysis:

• Support and Resistance Levels:
  • Riyank Arora, Technical Analyst at Mehta Equities, noted that the Bank Nifty was trading well above its immediate support level of 48,900 on intraday technical charts.
  • Immediate resistance is near 49,700. If the index holds above 48,900, it may move towards 50,000 and 50,500.
  • A break below 48,900 could lead to further weakness, pushing the index down to 48,500 and 48,000 levels.

Medium-Term Outlook:

• Shreyansh Shah of StoxBox remains optimistic about the medium-term performance of the Nifty Bank. He highlighted the commendable progress banks have made in improving their asset quality as reflected in their Q4FY24 results.

Market Insights:

• CLSA Recommendations:
  • Global brokerage firm CLSA included SBI, Canara Bank, and Bank of Baroda in its list of 54 “Modi stocks”.
  • “Modi stocks” are companies or sectors that benefit directly from government policies and initiatives under PM Modi, making them attractive for investors seeking government-driven growth.

Conclusion: The sharp decline in the Nifty Bank index underscores the volatility and sensitivity of the market to political developments. While immediate technical levels suggest potential areas of support and resistance, the medium-term outlook remains positive based on improved asset quality and broader economic trends influenced by government policies.

For more comprehensive coverage of legal developments, business news, and real-time updates on law and politics, visit Kanishk Social Media. If you found this news article informative, please share it with a friend!