Bulls ride Nifty Bank to fresh highs; is there more steam to this rally?

Bulls on Dalal Street further charged the banking sector up, lifting the Nifty Bank index to a fresh lifetime high on Wednesday.

The sectoral index ended 0.6% higher at 4,2729.10 points, a record closing high. Intraday, the index hit a record high of 4,2860.55 points.

Both private and public sector banks have been in the ‘buy’ list of investors, but the latter has gained more attraction due to strong improvement in earnings and attractive valuations.

Shares of public sector banks have, over the last three months, risen up to 90% with Union Bank of India leading the pack.

Analysts are bullish on PSU banks and see more steam for this rally on the back of rising credit growth and strong improvement in asset quality.

As for the sectoral index, analysts see potential for more upside in the coming sessions.

“The momentum oscillators are in the buy zone, which will confirm the strength of the index. The index remains in a buy-on-dip mode as long as the support levels are held,” said Kunal Shah, senior technical analyst at LKP Securities.

On the upside, the index faces hurdle at 43,000, where the highest open interest is built up on the call option side.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)