Bank Nifty hits all-time high, crosses 48,000 for first time
On December 15, the Bank Nifty index soared to a record high of 48,219.95, fueled by a surge in HDFC Bank stock due to the FTSE rejig. The Nifty50 index also experienced a 1.29% increase on the same day. HDFC Bank, which accounts for 11% of the Nifty50 index and 30% of the Bank Nifty index, saw its stock close at Rs. 1,656.55, up Rs. 6.40 or 0.39% on the National Stock Exchange (NSE).
HDFC Bank benefits from FTSE rebalance
HDFC Bank emerged as the top beneficiary of the FTSE rebalance, with its weightage in the index rising and attracting passive fund flows. Nuvama Research estimated that HDFC Bank would receive inflows worth $547 million, while IIFL projected inflows of around $451 million. Kunal Shah, senior technical and derivative analyst at LKP Securities, stated, "The upside potential for the Bank Nifty index is projected to reach 50,000, indicating continued optimism among market participants."
Banking stocks maintain momentum
Despite pressure in November when the Reserve Bank of India increased risk weightage on consumer loans, banking stocks have maintained their momentum. Chandan Taparia, analyst-derivatives at Motilal Oswal Financial Services Limited, noted, "Bank Nifty formed a bullish candle on the daily frame with a longer lower shadow indicating support-based buying." Ajit Mishra, senior vice president of technical research at Religare Broking, advised participants to align their trades accordingly and avoid contrarian positions as banking and IT majors continue to outperform.
