Home / Markets / Stock Markets /  Diwali Muhurat Trading 2022: Why experts suggest bank stocks to buy — explained

Diwali Muhurat Trading 2022: On Friday session in the week gone by, seven banking stocks ascended to 52-week high. These seven banking sticks include Axis Bank, Federal Bank, Bank of Baroda, IDFC First Bank, Indian Bank, South Indian Bank and Karnataka Bank. In fact, out of these 7 banking stocks, shares of Axis Bank and Federal Bank climbed to its record high. 

Axis Bank and Federal Bank has reported strong second quarter results and they are expected to remain in 'uptrend', said stock market experts when asked about the reason for rally in Axis Bank and Federal Bank shares. However, they maintained that mid-sized banks are expected to remain strong in short to medium term as market is expecting strong quarterly numbers of most of the banks due to lowering of provisioning and improvement in margins after the interest rate hike.

Speaking on the reason for rally in banking stocks, Ravi Singhal, CEO at GCL Securities said, "During Covid-19 pandemic, most of the Indian banks had to maintain provisioning that put an additional pressure on the quarterly numbers of the banks in last two years. However, that provisioning is now going down and hence banks are getting more money for business. Apart from this, due to rising interest rate regime, banks are further expected to get more money for business as investors are expected to park their money in banks for higher returns. So, these developments are expected to give positive results in banks net interest income (NII) and net interest margins (NIM). Therefore, market is highly bullish on banking stocks and this is the reason for 7 banking stocks hitting 52-week high in single session on Friday."

On other positive reasons that may continue to fuel banking stocks, Avinash Gorakshkar, Head of Research at Profitmart Securities said, "Government of India (GoI) has announced special focus on infrastructure sector. So, engineering, realty and infrastructure companies are expected to raise demand for business loan that is going to aide banking stocks' rally. Therefore, rally in banking stocks may continue for short to medium term."

Diwali Muhurat Trading 2022: Banking stocks to buy

On banking and financial stocks that one can look at during Diwali Muhurat Trading on Monday, Rahul Sharma, Director, Head - Technical & Derivative Research at JM Financial Services listed out shares of Axis Bank, Bajaj Finance and HDFC Bank.

Asked about Diwali stocks picks for 2022 Muhurat Trading session, Anuj Gupta, Vice President — Research at IIFL Securities recommended Federal Bank, IDFC First Bank and SBI stocks to those investors who are looking to buy banking stock in Diwali Muhurat Trading on Monday. He said that IDFC First Bank share price may go up to 100 whereas Federal Bank share price is expected to go up to 230 apiece levels by next year Diwali.

Yes Securities has recommended SBI shares to buy during Muhurat Trading 2022 session on Monday.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

Asit Manohar
Chief Content Producer at Live Mint Digital Team
Know your inner investor Do you have the nerves of steel or do you get insomniac over your investments? Let’s define your investment approach.
Take the test
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Recommended For You

Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!

Let’s get started
Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout