Banking Stocks Tumble as Bank Nifty Sheds 800 Points Amid Global Uncertainty

Investments Indian Investments

Posted by NewAdmin on 2025-04-01 08:42:57 |

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The Indian banking sector witnessed significant selling pressure on April 1, with the Bank Nifty index dropping nearly 800 points amid weak investor sentiment. As of 1:20 pm, Bank Nifty was trading 770 points lower at 50,794, reflecting the overall cautious mood in the market. Out of the 12 constituents of the Bank Nifty, nine were trading in the red, with HDFC Bank leading the losses. Shares of HDFC Bank fell by 3 percent to trade at Rs 1,771, while ICICI Bank shares declined by 2 percent, priced at Rs 1,321. Kotak Mahindra Bank also saw a decrease of 1.3 percent, trading at Rs 2,142 per share. Axis Bank followed suit, with its shares dropping nearly 2 percent to Rs 1,082.

The decline in banking stocks came on the heels of a broader market downturn. Benchmark indices faced selling pressure following US President Donald Trump’s comments about the imposition of broader reciprocal tariffs. As a result, the Sensex fell by 1,394.93 points or 1.8 percent to reach 76,019.99, while the Nifty dropped by 361.75 points or 1.54 percent to 23,157.60 around 1:25 pm. Despite the negative trend, IndusInd Bank’s shares bucked the prevailing sentiment by rising 4 percent to trade at Rs 677, offering some respite to the otherwise gloomy banking sector performance. Market breadth indicated that around 2,384 shares advanced, 1,130 shares declined, and 123 shares remained unchanged, highlighting a mixed sentiment amid heavy losses in the banking segment.

Market experts pointed to technical factors as well as global cues for the downturn. According to Shrikant Chouhan, Head of Equity Research at Kotak Securities, the Bank Nifty’s 200-day Simple Moving Average (SMA) at 51,000 serves as a critical support zone. If the index holds above this level, it could maintain a positive momentum with potential targets of 52,200 to 52,500. However, a close below the 51,000 mark could negatively impact sentiment, increasing the chances of the index falling to the 50,500 to 50,400 range. This technical perspective highlights the importance of the 200-day SMA in determining the short-term trajectory of banking stocks.

From a broader technical standpoint, the banking index has shown relative strength compared to frontline indices in recent weeks. The rapid recovery witnessed in the last two weeks followed multiple weeks of decline, demonstrating a faster pace of retracement. Asit C Mehta Investment Intermediates noted that the index has been trading within a downward-sloping channel for the past six months. The next significant challenge for the Bank Nifty would be to retest the upper end of this channel, provided it holds above the 50,500 mark. The upper trendline of the channel is estimated to lie between the 52,800 and 53,000 range, indicating potential resistance in the coming sessions.

The current selling pressure in the banking sector is reflective of broader market apprehensions driven by global economic uncertainties. The fear of new tariffs and their impact on the global economy continues to affect investor sentiment, causing volatility in banking and financial stocks. As the market digests the implications of US trade policies, the performance of banking indices will likely remain sensitive to both domestic and international developments. Investors are keeping a close watch on global cues and technical levels, particularly the 200-day SMA, to gauge the potential recovery or further decline in banking stocks.

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