Banking Stocks Rally as Bank Nifty Gains for Fifth Consecutive Session

IndusInd Bank, SBI, and Other Lenders Surge Up to 4% Amid Strong Market Momentum

Banking stocks extended their rally for a fifth consecutive session on March 19, propelling the Bank Nifty index to a fresh high of around 49,700. The ongoing rebound in the banking sector has helped recover a portion of the steep losses suffered since December 2024, with technical analysts expressing confidence in further upside momentum.

Bank Nifty Outlook: Strong Bullish Sentiment

According to Axis Securities, the trend-deciding level for Bank Nifty is 49,115.

• If Bank Nifty trades above this level, it could rally further to 49,600-49,886-50,371 levels.
• If it trades below 49,115, profit-booking could trigger a correction towards 48,829-48,344-48,058 levels.

Analysts at Angel One emphasized that March 18’s rally decisively broke through the crucial 48,800-48,900 resistance zone, confirming a shift in momentum favoring the bulls. They anticipate further upside potential, with Bank Nifty likely to sustain its upward trajectory.

Top Gainers: AU Small Finance Bank, Federal Bank, and PNB Lead the Charge

Among individual stocks, AU Small Finance Bank emerged as the top performer, rising nearly 4% on strong buying interest. The stock rebounded after touching a 52-week low of ₹478 on March 18.

Federal Bank and Punjab National Bank (PNB) followed closely, gaining around 2% each.

IndusInd Bank shares advanced by 1.8%, briefly surging 3% earlier in the day, before paring some gains. The positive sentiment in IndusInd Bank was fueled by assurances from IndusInd International Holdings (IIHL) Chairman Ashok Hinduja, who reaffirmed his commitment to supporting the lender’s capital requirements and stated that it was an opportune time to increase stake in IndusInd Bank.

Large-Cap Banks Register Steady Gains

Heavyweight banking stocks also contributed to the market’s upward momentum:

• State Bank of India (SBI) gained over 1%, trading at ₹746 per share.
• Axis Bank rose more than 1%, reaching ₹1,057 per share.
• HDFC Bank climbed nearly 1%, trading at ₹1,748 per share.
• Canara Bank and Bank of Baroda saw gains exceeding 1%, reflecting broad-based strength in the banking sector.
• IDFC First Bank, ICICI Bank, and Kotak Mahindra Bank traded with marginal gains, maintaining positive sentiment across the sector.

Technical Indicators and Market Sentiment

The recent rally in Bank Nifty is backed by technical strength, as key indicators point to further bullish momentum.

• Moving Averages: Bank Nifty is currently trading above its 20-day and 50-day moving averages, signaling positive sentiment among investors.
• RSI (Relative Strength Index): The RSI remains in bullish territory, suggesting that buying momentum remains strong.
• Market Breadth: Most banking stocks are witnessing higher-than-average trading volumes, reinforcing confidence in the ongoing uptrend.

According to market strategists, the banking sector’s resilience amid global and domestic uncertainties reflects strong institutional inflows, with investors optimistic about earnings growth and credit expansion prospects.

Sector-Wide Optimism Amid Economic Growth Projections

The banking sector’s performance remains closely tied to India’s economic trajectory, with analysts highlighting several growth catalysts:

• Rising credit demand: With India’s GDP growth expected to remain strong in 2025, banks are poised to benefit from increased loan disbursements.
• Improving asset quality: The decline in non-performing assets (NPAs) has strengthened the balance sheets of major banks, improving investor sentiment.
• Interest rate stability: Expectations that the Reserve Bank of India (RBI) will maintain a stable interest rate environment have further bolstered banking stocks.