Frenzy-like steps in small banks may cool down, HDFC Bank, Kotak Bank will be caught

Smaller banks have seen a particularly strong rally in recent months. But some analysts expect stocks of smaller banks to rally in the coming days, and largecaps such as Kotak Bank and HDFC to gain momentum.

“The leader of the current bull market is Bank Nifty, and it is continuing its lead aggressively. The fundamentals are also supporting the move in the banking indices, and the outperformance is likely to continue for the next few quarters. Although the frenzied moves in smaller banks may have cooled down, the overall outlook for the banking industry remains positive. State Bank Of India and ICICI Bank may continue to provide support, while HDFC bank And Kotak Bank may also pick up the pace,” said Santosh Meena, Head of Research, Swastik Investmart Limited

Kotak Bank and HDFC Bank, which have underperformed bank nifty The index has risen between 4% and 12% so far this year, on a year-to-date basis.

“In India, the PSU bank segment is the strongest segment within the bank index, and the bank index and may remain resilient. HDFC twins display strength. IT segment has some more steam for recovery. Restoration FII buying is a Further positive. However, the Nifty is unlikely to break out of the 18,400-18,800 range and sustain higher. Higher valuations are likely to cap the rally, said VK Vijayakumar, chief investment strategist at Geojit Financial Services.

ICICI BankAxis Bank, Federal Bank and SBI are among Motilal Oswal’s Top Banking Picks.

“With the increase in the repo rate, lending rates for banks have been rising steadily over the last few months. However, the rise in deposit rates has been slow. As competition for deposit raising begins to intensify, we expect deposit rates to rise, thus increasing funding costs. A high LCR (Liquidity Coverage Ratio) and a healthy CASA mix could lead to a calibrated increase in deposit rates, given adequate liquidity. Banks with a high mix of floating-rate books stand to benefit from continued monetary tightening as the RBI on 7 Dec 22 hiked the repo rate by a further 35bp and scaled back its accommodative stance to keep inflation under control ( unchanged), “said the brokerage.

bank nifty key levels

“Technically, 44200 is an immediate hurdle, and 44700/45000 are the next resistance levels. On the downside, 43500 is an immediate and strong support on any profit booking, and 42000 will act as base on any correction,” said Santosh Meena, Head of Research, Swastik Investmart Ltd.

Disclaimer: The views and recommendations given above are of individual analysts or broking companies and not of Mint. We advise investors to do due diligence with certified experts before making any investment decision.