The Nifty Bank breached the 51,000 milestone for the first time in intra-day trade on Monday, riding on the post-exit polls euphoria in the stock market.
It has taken around six-and-a-half years for the index to double as it had first crossed the 25,000-mark on July 27, 2017, and two-and-a-half years to cover the 10,000-point journey from 40,000. The index had touched the 40,000 mark in October 2021.
On Monday, the Nifty Bank index closed at 50,979.95, registering a gain of 4%.
The Nifty PSU bank index also witnessed a surge of over 8% to reach an all-time high of 8,006 points, while the Nifty Private Bank index closed 3% higher at 25,032 points. Among the banking stocks, Bank of Baroda led the rally, rising 12% followed by Central Bank of India and State Bank of India (SBI), which rose 12% and 10%, respectively.
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“Bank Nifty broke through all resistance levels, indicating a strong bullish sentiment driven by the exit poll results. However, it is advisable to observe the market for the next two-three sessions before making any conclusions about adopting a buy-on-dip strategy,” said Rupak De, analyst at LKP Securities.
SBI became the third bank, after HDFC Bank and ICICI Bank, and the seventh company to surpass Rs 8-trillion market capitalisation. After hitting a record high of Rs 912 apiece, the shares of the lender closed at Rs 909 apiece, registering a gain of around 10%. Stocks of Canara Bank, Indian Bank, Punjab National Bank, UCO Bank, Punjab & Sind Bank, Union Bank of India, Indian Overseas Bank, Bank of Maharashtra, and Central Bank of India witnessed gains ranging between 3% and 5%.
The impressive performance of banking stock highlights the investors’ confidence and the positive outlook for the India’s banking sector. Indian banks have reported a robust earnings growth in the fourth quarter of FY24, driven by strong loan growth. The net profit growth of listed banks was bolstered by an increase in other income and credit growth. The total net profit of listed public and private sector banks in FY24 surged by 39% year-on-year, surpassing Rs 3 trillion for the first time.
The recovery of bad loans and the government’s supportive measures have played crucial roles in strengthening the financial stability of banks, contributing to their recent achievements in market capitalisation and net profit.
