Bank Nifty Slips After Record High but Set for Longest Weekly Winning Run Since June

Bank Nifty Snaps 2-Day Gains After Hitting Record High; Index Heads for Longest Weekly Winning Run Since June

In a session marked by volatility and profit booking at higher levels, Bank Nifty snaps 2-day gains after hitting record high, signalling a brief pause in its strong upward trajectory. The index, which scaled a fresh lifetime high earlier in the week, retreated nearly 0.9 percent intraday on Friday as investors locked in profits amid stretched valuations and overbought technical conditions. Despite the decline, the index remains firmly on track for its longest weekly winning run since June.

Profit Booking Emerges After a Record-Breaking Rally

The pullback came after Bank Nifty surged to 59,440.10 on Thursday, marking consecutive all-time highs driven by robust quarterly results from major lenders and upbeat sentiment around the banking sector. However, with the index trading in overextended zones, investors opted to trim positions, resulting in a mild correction.

Earlier in the session, the index slipped to 58,833, erasing the past two days’ gains. Still, even with the drop, Bank Nifty snaps 2-day gains after hitting record high but continues to hold on to weekly gains of more than 0.5 percent.

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Index Set for Longest Weekly Winning Run Since June

Despite Friday’s weakness, the index’s weekly performance remains positive. Bank Nifty has closed three straight weeks in the green since October 27. If it finishes this week with gains intact, it will log its longest weekly winning streak since early June, reflecting sustained optimism in the banking space.

Market momentum has been powered by strong results from HDFC Bank, State Bank of India (SBI) and other heavyweights. Analysts note that the banking index has outperformed frontline benchmarks, which are still a step away from their all-time highs. Year-to-date, Bank Nifty has risen nearly 16 percent, outshining the 10 percent gains posted by the Nifty 50.

Analysts See Credit Growth Improving as Rate Cuts Spur Demand

Analysts told Reuters that banks are well-positioned to capitalise on improving credit demand, especially after the Reserve Bank of India’s rate cuts that have begun to ease borrowing costs. Stable asset quality, moderating foreign outflows and relatively attractive valuations compared to other sectors have collectively boosted investor conviction.

With credit demand rising across retail, MSME and corporate sectors, lenders are expected to maintain growth momentum in the coming months.

Canara Bank Leads Losers as Select Private Banks Also Decline

Among index constituents, Canara Bank emerged as the top loser, slipping more than 1 percent to Rs 146.37. Other major names such as ICICI Bank, Punjab National Bank (PNB), Bank of Baroda, HDFC Bank and Axis Bank fell between 0.5 percent and 1 percent.

SBI and AU Small Finance Bank also traded in the red with marginal losses.

However, bucking the trend, IndusInd Bank jumped over 2.5 percent, while Kotak Mahindra Bank, IDFC First Bank and Federal Bank saw mild gains, offering partial support to the index.

The Nifty PSU Bank index dropped 0.99 percent, while the Nifty Private Bank index slipped 0.31 percent, reflecting broad weakness in banking stocks during the afternoon trade.

Technical View: Key Levels and Momentum Indicators Point to Possible Consolidation

With Bank Nifty snaps 2-day gains after hitting record high, technical analysts believe the index may be heading toward a brief consolidation phase.

PL Capital noted that frontline banking stocks such as HDFC Bank, ICICI Bank and Axis Bank display signs of regaining strength, with medium-term targets of 60,500 and 63,000 still achievable. However, they emphasised that the index must maintain support at the 50EMA near 57,200 to keep the broader uptrend intact.

The brokerage pegged immediate support at 59,169, followed by 58,990, both of which were breached intraday. Resistance has been placed at 59,483 and 59,619.

Choice Broking’s Amruta Shinde highlighted 59,000–59,200 as critical support and 59,500–59,700 as key resistance. A breakout above this range could reaccelerate the index’s upward trajectory.

Analysts Note Strong Demand Despite Intraday Weakness

According to Bajaj Broking, Bank Nifty’s recent candlestick patterns reflect steady underlying demand, with intraday dips being absorbed quickly. The index remains comfortably above its key short-term moving averages, supporting the bullish momentum.

They expect the index to test the 59,800–60,000 zone soon. Any minor pullback is likely to find support around 58,800–58,600, which now serves as a near-term demand zone.

Short-Term Caution Advised but Broader Trend Still Bullish

LKP Securities’ Vatsal Bhuva noted that while the index has shown exceptional strength, some caution is warranted due to an overbought RSI reading of 74. He suggested entering fresh long positions only above 59,500 or on dips toward 58,800, where reward-to-risk becomes favourable.

Massive put writing at 59,000 strengthens near-term support, with resistance projected at 59,500 and 60,000.

Outlook: Bulls Maintain Upper Hand as Rally Takes a Breather

Even as Bank Nifty snaps 2-day gains after hitting record high, analysts agree that the overall structure remains positive. With stable fundamentals, improving credit growth, strong earnings and supportive technicals, the banking index appears poised to continue its upward journey after a brief consolidation phase.

• Nifty 50
• Bank Nifty
• Sensex