BackNifty Bank index fell over 3% in five sessions. Experts list out these five stocks to buy today
Nifty Bank index may become bullish again once it closes above 44,200 level, say stock market experts
PremiumStock market today: Extending weakness for fifth day in a row, Nifty Bank index today opened with downside gap and went on to hit intraday low of 43,600 levels, logging 1364 points loss in five straight sessions. Comparing Bank Nifty's last positive closing of 44,964 on 8th August 2023 and today intraday low of 43,600 mark, Bank Nifty has logged over 3 per cent loss in five successive trade sessions since Wednesday last week.
According to stock market experts, today fall can be attributed to Fitch warning to downgrade dozens of US banks including JP Morgan. This has changed the sentiments on banking sector, which was already reeling under the sell off heat for last four days. But, they maintained that Indian and US banking systems are mutually exclusive and it won't have any long term impact. But, they maintained that high interest regime has peaked out in India and now banks with better CASA would be able to attract more customers and deliver better numbers in upcoming quarters. So, one should look at big sized PSU and private banks for medium to long term time horizon.
Stock market experts went on to add that Bank Nifty has breached its support at 43,800 to 43,750 levels and its closing today would be important to watch. If it manages to close above 43,750 to 43,800 range, then we can expect recovery in the index. But, Bank Nifty would be considered in bull trend only when it closes above 44,200 levels.
Speaking on the reasons that has put Bank Nifty under bears' grip, Avinash Gorakshkar, Head of Research at Profitmart Securities said, "Today's dip in Bank Nifty index is completely sentimental as Fitch Ratings has warned US Bank to downgrade ratings of more than dozen of the American banks, including JP Morgan. However, ?US banking system and Indian banking systems are completely different and mutually exclusive. So, it is just a short term weakness and banking stocks are expected to bounce bank strongly after the trigger fades."
On why Bank Nifty index has been falling for five straight sessions, Saurabh Jain, Vice President — Research at SMC Global Securities said, "In India, high interest regime has peaked out and now those banks whose CASA has improved would be able to offer loans at lower interest rates. In other words cost of business is decided by CASA and better CASA would mean better cost of lending for banks. So, large banks are expected to benefit in coming quarters and hence, one should buy large sozed PSU and private banks as their CASA is expected to improve."
Bank Nifty outlook
On what chart pattern suggests in regard to Nifty Bank index, Sumeet Bagadia, Executive Director at Choice Broking said, "Bank Nifty has breached its strong support placed at 43,800 to 43,750 zone. Now, one can expect recovery only when it closes above 43,800 levels. In case of closing below 43,800 to 43,750 zone, we may see the index going down towards 43,300 levels."
Sumeet Bagadia said that today's closing of Bank Nifty is important. If the index closes above 43,800 levels, then we can expect some strong rebound in the index. However, the index can be assumed bullish only when it closes above 44,200 levels.
Stocks to buy today
On stocks to buy in current weak markets, Avinash Gorakshkar said, "In PSU bank segment, one can look at SBI, Bank of Baroda and Canara Bank as these state-owned banks have delivered strong Q1 numbers. In private bank segment, one can look at HDFC Bank and ICICI Bank shares.
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 decisions.
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