Bank Nifty weakens below 60,000 as banking stocks face broad-based selling
The Bank Nifty slipped below the psychologically crucial 60,000 mark on Wednesday, reversing the gains seen in the previous session as selling pressure intensified across major banking stocks. The index touched an intraday low of 59,771.95 and was trading lower by over half a percent, reflecting cautious sentiment among investors.
The decline was led by heavyweight private lenders, with sustained weakness in select frontline stocks dragging the overall index lower. Out of the 14 constituents of the Bank Nifty, as many as 10 were trading in the red, underlining the broad-based nature of the sell-off.
HDFC Bank and IndusInd Bank emerge as key drags on the index
Shares of HDFC Bank and IndusInd Bank were among the top losers on the Bank Nifty, contributing significantly to the day’s weakness.
HDFC Bank extended its decline for the third straight session, falling nearly 5.5 percent over the past three trading days. The continued selling pressure in the stock weighed heavily on the index, given its large weightage.
IndusInd Bank also slipped more than 2 percent, snapping the gains recorded in the previous session. Market participants noted that profit booking after recent moves, coupled with cautious sentiment around banking stocks, triggered the pullback.
An analyst tracking the sector said, “When heavyweight stocks like HDFC Bank lose momentum, it becomes difficult for the Bank Nifty to sustain higher levels, even if select names attempt a rebound.”
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Bank Nifty reverses Tuesday’s gains as sentiment turns cautious
On Tuesday, the Bank Nifty had outperformed the broader market, raising hopes of a near-term breakout. However, Wednesday’s session saw those gains quickly reversed as traders chose to pare positions near higher levels.
The index slipping below 60,000 is being closely watched by market participants, as the level has acted as both support and resistance in recent weeks. A decisive move on either side is expected to set the tone for the next short-term trend.
The broader weakness suggests that investors are turning selective, preferring to wait for clearer cues before committing fresh capital to banking stocks.
Technical view highlights crucial resistance and support zones
From a technical perspective, analysts believe the Bank Nifty is currently at a critical juncture. Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, said the index had shown strength in the previous session before encountering resistance.
“The Bank Nifty had outperformed frontline indices on Tuesday and formed a bullish candle with a minor upper shadow,” Shah said.
He highlighted that the 60,400–60,500 zone would act as an important resistance area for the index. According to him:
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A sustained move above 60,500 could open the door for further upside
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The next potential targets could be around 61,100, followed by 61,600 in the short term
On the downside, Shah pointed out that the 59,700–59,600 range is expected to act as a key support zone. A decisive break below this band could increase near-term pressure on the index.
PSU Bank index snaps 7-day winning streak amid mild selling
Alongside private banks, public sector lenders also witnessed a pause in their recent rally. The PSU Bank Index snapped its seven-day winning streak, declining by up to 1 percent during the session.
The correction comes after a strong run in PSU banking stocks, where optimism around asset quality improvement and better earnings had fueled gains over the past several sessions.
Market participants believe the dip reflects healthy profit booking rather than a change in the broader trend.
Bank of Baroda, Bank of India weigh on PSU Bank index
Within the PSU Bank index, Bank of Baroda emerged as the major laggard, declining up to 0.62 percent. The stock saw selling pressure after recent gains, contributing to the index’s decline.
Other PSU lenders also traded marginally lower:
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Bank of India slipped around 0.23 percent
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Punjab National Bank eased nearly 0.08 percent
Despite the day’s weakness, analysts maintain that the broader outlook for PSU banks remains stable, supported by improving balance sheets and controlled asset quality.
What investors should watch in the near term
As banking indices consolidate near key levels, experts advise investors to closely monitor technical cues and stock-specific developments.
Key factors to track include:
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Whether Bank Nifty holds above the 59,600 support zone
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A breakout above 60,500 for confirmation of renewed upside
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Stock-specific trends in heavyweight banks like HDFC Bank
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Sustainability of the broader PSU bank rally after profit booking
Summing up the market mood, a technical analyst said, “The banking space is at a make-or-break level. A clear directional move will likely emerge once the index decisively crosses resistance or breaks key support.”
For now, cautious optimism prevails, with investors balancing strong fundamentals against near-term technical pressures in banking stocks.
