Banking Stocks Stage Strong Intraday Comeback, Lift Index Into Green
Banking stocks continued their upward momentum for a third consecutive session on Monday, recovering sharply from intraday lows and reinforcing near-term strength in the sector. The Bank Nifty index rebounded nearly 400 points from its day’s low to trade firmly in positive territory, reflecting sustained buying interest despite broader market volatility.
The recovery came after a weak start, as early selling pressure mirrored cautious sentiment across equities. However, investors stepped in to accumulate banking stocks at lower levels, helping the index reverse losses and close higher for the third straight day.
Bank Nifty Rises for Third Session, Gains Over 1% in Three Days
With the latest move, the Bank Nifty has now risen for three consecutive sessions, gaining over 1 percent during this period. Out of the 12 constituents in the index, 10 stocks were trading in the green, highlighting broad-based participation.
Only Axis Bank and HDFC Bank lagged the rally and traded in negative territory, while the rest of the banking pack contributed to the recovery. The strength in banking stocks also provided stability to the broader market, which remained range-bound amid mixed global cues.
IDFC First Bank, Federal Bank and Canara Bank Lead the Gains
The rally was led by IDFC First Bank, which climbed around 2 percent, emerging as the top gainer among banking stocks. Federal Bank followed with gains of about 1.4 percent, while Canara Bank advanced nearly 1.1 percent.
Other banks that supported the upmove included AU Small Finance Bank, Punjab National Bank, IndusInd Bank, and State Bank of India, all of which rose by up to 1 percent. The participation of both private and public sector banks reflected improving sentiment across the sector.
Market participants noted that selective buying in mid-sized banks and PSU lenders has been increasing in recent sessions, as valuations appear more attractive after recent consolidation.
Technical Support Continues to Strengthen Banking Index
From a technical perspective, analysts believe the structure of the Bank Nifty remains constructive. Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities, said the index showed resilience by shaking off early weakness.
“Bank Nifty shrugged off early weakness and staged a steady recovery to close at 59,462, up 0.12 percent. The index continues to find strong support near the 20-day EMA, which has been acting as a dynamic support over the past few sessions, suggesting resilience and stability in the banking space,” Shah said.
The ability of the index to repeatedly find buying interest near key support levels has improved confidence among short-term traders and positional investors.Key Resistance and Support Levels to Watch
According to technical analysts, the 59,500–59,600 zone is likely to act as an immediate resistance area for the Bank Nifty. A sustained breakout above 59,600 could open the door for a further pullback rally toward 59,900, followed by the psychologically important 60,200 level.
On the downside, the 59,100–59,000 zone is expected to provide strong support. As long as the index holds above this range, the near-term trend is expected to remain positive, with dips attracting buying interest.
This defined trading range suggests that the banking index may continue to consolidate with a positive bias, barring any sharp negative trigger from global or domestic developments.
Why Banking Stocks Are Finding Support
Several factors are supporting banking stocks in the current environment. Valuations in select banks have become reasonable after recent corrections, prompting value buying. Additionally, expectations of stable asset quality, steady credit growth and improving margins have kept investor interest intact.
Public sector banks, in particular, have seen renewed traction as balance sheets strengthen and earnings visibility improves. Private sector banks, while selective, continue to attract long-term investors on dips.
Market participants also point out that banks tend to outperform during phases of consolidation in the broader market, given their heavyweight status and sensitivity to domestic growth trends.
Broader Market Volatility Persists, but Banks Show Relative Strength
The broader market remained volatile during the session, influenced by foreign fund outflows, currency weakness and uncertainty around global trade developments. Despite this, banking stocks managed to outperform, offering stability to headline indices.
Analysts believe that as long as Bank Nifty continues to hold above its key support levels, it could act as a cushion for the market during periods of heightened volatility.
Outlook: Consolidation With an Upward Bias
The third straight day of gains suggests that banking stocks are attempting to build a short-term base after recent swings. While immediate resistance levels may cap sharp upside, the overall setup points toward range-bound trading with a positive bias.
For investors, the focus will remain on stock-specific opportunities within the banking space, particularly among lenders showing improving fundamentals and technical strength. Any decisive breakout above resistance could further strengthen sentiment and push the Bank Nifty closer to the 60,000 mark in the near term.
