Nifty Bank Plummets 370 Points as Major Banks, Including PNB and SBI, Face Up to 2% Decline—What’s Next for Investors?

The Nifty Bank index experienced significant downward pressure on Monday, declining by over 370 points, or nearly 0.7%, and settling at 53,869. This decline marked a noticeable underperformance compared to the benchmark Nifty 50, which saw only marginal losses. Key players within the banking sector, including Union Bank of India, Punjab National Bank, and Canara Bank, registered approximately 2% drops, while larger banks such as Bank of Baroda, Kotak Mahindra Bank, Axis Bank, ICICI Bank, and State Bank of India each fell about 1%. In contrast, some stocks like HDFC Bank and Federal Bank managed to resist the overall trend, posting slight gains amidst the broader market weakness.

From a technical perspective, analysts from Bajaj Broking indicated that the Nifty Bank index formed a bearish candle characterized by a lower high and a lower low, which underscores the prevailing selling pressure. The index closed below the 20-day exponential moving average (EMA), suggesting that it may continue to face challenges in the near term. The immediate support levels are identified at 53,970, with further support at 53,650, both of which have been tested recently. Resistance levels are foreseen at 54,610 and 54,900, highlighting possible ranges for traders to monitor before a direction is determined.

Axis Securities emphasized that the crucial threshold for the Nifty Bank index remains at 54,513. A firm close above this level could signal a potential rally towards resistance between 54,910 and 55,979. Conversely, trading below this threshold may trigger profit booking, leading to corrections between 53,842 and 52,774. The market sentiment appears fragile; thus, investors should exercise caution while considering positions in the sector in light of these technical signals.

Looking ahead, Bharat K Gala from Ventura advised a negative weekly outlook for the Nifty Bank, cautioning that unless the index can maintain above 54,116, traders should prepare to utilize lower levels such as 53,930 as potential buying opportunities. If the index shows resilience at the 52,072 level, it could initiate a rebound; however, any close below this point should be interpreted as a bearish signal for the current uptrend. Therefore, investors are encouraged to stay vigilant and assess market movements critically as the landscape evolves.

Source: The Economic Times

(Expert Note: This report was prepared by the Wealthova team.)