Nifty Rides on Rising Bank Nifty, Indusind Stuns the Street It was good going for the markets, which saw a colossal breakout. Bank Nifty provided an enormous support to Nifty. Bank shares were in the limelight and trading higher by 5 per cent on the bourses after banking major IndusInd Bank reported strong set of numbers in December quarter in spite of demonetization of high-value currency notes. Nifty closed up 92.05 points or 1.1 percent at 8380.65 and Bank Nifty closed 420 points higher at around 18830. IndusInd Bank share price, the largest gainer among banking stocks, has surged 6 per cent to Rs 1,231 on the National Stock Exchange (NSE) after reporting a healthy 29 per cent year on year (YoY) growth in net profit at Rs 751 crore in Q3FY17 against Rs 581 crore in the same quarter last financial year. South Indian Bank share price was up 5% to Rs 21.85 after the bank on Wednesday reported 9.6 per cent YoY rise in net profit at Rs 111 crore in Q3FY17. The bankâ€™s asset quality remained firm on sequential basis. The gross non-performing assets (GNPAs) increased slightly to 3.98% of advances from 3.96% in the previous quarter. The net NPAs were down to 2.52% from 2.77% in September quarter.
Yesterday, Bank Nifty, the second largest gainer among sectoral indices after Nifty Metal Index, was up over 2 per cent as compared to 1.11 per cent rise in the benchmark Nifty 50 index. Nifty Private Bank and Nifty PSU Bank index were up 2.21 per cent and 2.16 per cent, respectively.
Stock Movement of PSBs: Corporation bank share price was up by 2.50 per cent, Indian Bank share price was up by approximately 5 per cent, IOB share price gained over 2 per cent and UCO Bank share price gained approximately 2%.
Stock movement of Private Sector Banks: Dhanlaxmi Bank share price gained approximately 6 per cent yesterday, JK Bank share price surged over 2 per cent and RBL Bank share price went up by approximately 2 per cent.
YES Bank, Federal Bank, Bank of Baroda, Canara Bank, Bank of India, State Bank of India (SBI), ICICI Bank, and Kotak Bank were also up 2% to 6%.
Expertâ€™s Insight of the Market: Experts anticipate the market to strengthen further maybe before the Budget on the back of optimism and the fact that negative impact of demonetization is behind. However, this does not inevitably mean the market has bottomed out for good because world market is skewed in favor of US market. Chances are high that the US will shine bright with the Dollar Index Swelling and Rupee weakening which eventually means that the market will correct as well. They are of the view that sector rotations will keep cushioning Nifty and they are upbeat on the Benchmark Index till the expiry but are staying cautious of Bank Nifty. Bank Nifty has already mounted about 1000 points since last Wednesday and now there is no fundamental reason for it to keep going up.
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Article Written by Tanaya Nath