Nifty Bank index hits new record high as PSU lenders rally

After a stellar show by banks in the September quarter earnings, Nifty Bank on Wednesday hit a fresh record high of 41,939.75 as it rallied up to 0.61% during the day. Headline index Nifty, on the other hand, was around 400 points shy of its record high.

The index is trading at a P/E of 17.4 and above eight out of eight SMAs. On the year-to-date (YTD) basis, the index has gained over 17%.

Of the 12 constituents, PNB rallied up to 9%, while other banks, including Bank of Baroda and AU Small Finance Bank gained around 3%.

Other stocks from the pack which rose over 1% were IndusInd Bank, Bandhan Bank and Federal Bank. Furthermore, IDFC First Bank, Kotak, SBI, HDFC Bank and Axis Bank were trading flat with a positive bias. ICICI Bank, on the other hand, was the only underperforming counter.

Given the rally in PSU lenders, the PSU Bank index has also hit a new high of 3,792.5, gaining 2.77% intra-day. The index on a YTD basis has edged higher by a substantial 50%.

“The index remains in buy mode as long as it holds the support of 40,800 on the downside. The index once breaches above 42,000 will witness a sharp short covering move on the upside towards 43,000-44,000 levels,” said Kunal Shah, Senior Technical Analyst at LKP Securities.

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