PSU banks hit fresh 52-week highs as Bank Nifty touches record high

Market


MUMBAI : A slew of PSU banks hit a 52 week high as the Bank Nifty touched a record high of 42860.55 today before settling at 42729.10 , up 0.64% from its previous closing . 

Among those that hit new 52 week highs were Bank of Baroda at 170.30, Bank of India ( 81), Canara Bank ( 326.55), Indian Bank ( 279.45) , PNB (50.85) . 

SBI ended the session just 2.6% away from its 52 week high of 622.7 hit on November 7. 

PNB, BoB and SBI make up the 12 member Bank Nifty . 

 “Most of these banks are under-owned and available at cheap valuations compared to their private sector peers,” said Rajesh Palviya , VP (research) , Axis Securities . “This rally has been led by banks which have outperformed other sectors in the current leg and that could continue. Nifty , which closed at 18267 is still below its record high of 18604.45 while Bank Nifty is making progressively new records on improved asset quality and credit growth of 129 trn as of October 21 being at a record high.”

Other analysts recommend buying Bank Nifty on dips . 

“The Bank Nifty index continued its outperformance and the index managed to hold the critical support zone 42,500-42,400,” said Kunal Shah, senior technical analyst at LKP Securities . “ The index on the upside faces a hurdle at 43,000 where the highest open interest is built up on the call side. The index remains in a buy-on-dip mode as long as the mentioned support levels are held. The momentum oscillators are in the buy zone which will confirm the strength of the index.”

The rise in banks is also enabling performance of Nifty as financial services have a 37.04% weight in the index , led by HDFC Bank (8.26% weight) , ICICI Bank (7.94%), HDFC (5.62%) , Kotak Bank (3.5%) and Axis Bank (3%). 

Both Kotak and Axis Bank gained a percent each , SBI gained 1.3% and BoB a percent . 

The Bank Nifty’s outperformance is reflected by 10 out of its 12 constituents trading above its 200 day moving average , while Nifty has 39 of its 50 constituents trading above their 200 day moving averages. 

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