Where is Nifty Bank headed after HDFC Bank drags it down by 1,050-point? (2024)

The ripples of the fall were seen in other banking stocks especially after their own quarterly numbers were also released.

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An over 3-percent drop in banking heavyweight HDFC Bank, along with selling in other banking stocks, dragged Nifty Bank below a key support level, paving the way for potential further downside. All banking index constituents except ICICI Bank were in red today, as earnings reports from lenders poured in.

Nifty Bank lost about 1,043 points, or 2.26 percent to end at 45,015 points. At one point during the day the index was down over 1,200 points.

"Afterfour days of sideways consolidation,the index broke its recent swing low of 45,500 support. The next support for the index are 44,800 and 44,000 are the supports for the coming week. While 46,000 is building up as a resistance," said Akshay Bhagwat, Senior VP Derivative research at JM Financial.

He added thatahead of theJan monthly expiry, there is a notable shift of OI in CE selling bets from 47,000 to 46,000, hinting 46,000-46,200 levels are building up as a resistance. Put writers shiftedtheir OI support base to lower strikes at 44,000as selling pressure aggravated in the day trading session.

In the afternoon trade, HDFC Bank was down over 3 percent at Rs 1,430, extending the last week's losses. The stock has fallen over 15 percent in the last one week. Investors dumped HDFC Bank after its December quarter financials showed a strain on margin, sluggish deposit growth, and decadal low earnings per share (EPS).

Also read: Lessons from HDFC Bank’s crash

The ripples of the fall were seen in other banking stocks, especially after their own quarterly numbers were also released. IDFC First Bank was down over7 percent, followed by IndusInd Bank that slipped6 percent.PNB and AU Small Finance Bank were other top losers. ICICI Bank was the sole gainer, rising2 percent.

The selling in banking stocks also put pressure on broader benchmark indices Nifty 50 and Sensex. Bothe indices were down over 1 percent as well.

Moneycontrol News

first published: Jan 23, 2024 01:08 pm

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