Can Bank Nifty index climb to 50K in current Santa rally in stock market?
- Stock market today: Bank Nifty index today climbed to a new peak of 47,987 during early morning deals
Stock market today: Following strong global market sentiments on US Fed rate cut signal in 2024, Indian stock market extended its rally for third straight session on Friday. Dalal Street observers believe that it could be the Santa rally as this bull trend has come just ahead of Christmas festival. They said that growth and rate sensitive stocks are attracting attention of value investors as these segments are expected to outperform other segments in near term.
As Bank Nifty index is completely a rate sensitive stock and it has been climbing to new highs on a regular basis, it becomes important to find out whether the banking stock would touch 50,000 levels in this Santa rally or not.
According to stock market experts, current rally in Bank Nifty is strong from both fundamental and technical perspective. They said that Bank Nifty index has given breakout at 47,500 levels and is looking bullish on chart pattern. Apart from this, US Fed rate cut signal in recently concluded US Fed meeting os also supporting the buying interest of stock market bulls. However, they maintained that large-cap Bank Nifty stocks like State Bank of India (SBI), HDFC Bank, Kotak Mahindra Bank, ICICI Bank are yet to participate fully in this ongoing Santa rally ahead of Christmas 2023. If the uptrend in these large-cap bank stocks continues and the rally turns out a participatory rally among all banking stocks, then we may expect the Bank Nifty index to touch 50,000 market in this current stock market rally.
US Fed rate cut in focus
Speaking on the reason for continous rise in Bank Nifty index, Saurabh Jain, Vice President — Research at SMC Global Securities said, "After US Fed's rate cut signal in 2024, other central banks across globe may also think of trimming interest rates in near term. As Indian economy has been doing well and giving bettern-than-expected GDP and other numbers, RBI may also think of cutting interest rate and announce the end of high interest rate cycle in India. In that case, loan business of banks are expected to pick up as retail loan interest rate is expected to go down in that scenario. Lower interest rate would mean higher liquidity, which means higher spendings. So, people may think of spending higher on their life style buying new home and vehicles."
On technical outlook of Bank Nifty today, Vaishali Parekh, Vice President — Technical Research at Prabhudas Lilladher said, "BankNifty has indicated a clear breakout above the crucial 47,500 levels to strengthen the trend overall and has opened the gates for further targets of 49,200 and 50,000 levels in the coming days. From current levels, the zone near 46,300 level shall be maintained as the important support zone from current levels."
Stocks to watch
However, Avinash Gorakshkar, Head of Research at Profitmart Securities said, "Bank Nifty has been climbing to new highs but large-cap banking stocks like SBI, HDFC Bank, Kotak Mahindra Bank, ICICI Bank are yet to fully participate in this rally. So, it is very important for these large-cap stocks to participate in this stock market rally. It's true that they are participating in this rally, but more uptrend is required in these large-cap stocks to fule Bank Nifty index at 50K peak."
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decision.
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