Nifty Bank Slides as Major Banks Experience Market Correction

On January 13, 2025, the Nifty Bank index reflected a downward trend as markets corrected significantly. The index fell by 0.44% around 10:33 AM, trailing slightly behind the Nifty 50, which was down 0.42%. The sector opened at 48,264 points, reaching a low of 48,116 points—the lowest it had been since June 2024.

Performance of Major Banks

Out of the 12 banks listed in the Nifty Bank sector, only ICICI Bank, HDFC Bank, IndusInd Bank, and IDFC First Bank managed to maintain positive performance. IndusInd Bank particularly stood out with an increase of nearly 3%, credited to the release of its shareholding data for the December 2024 quarter, showing a decrease in foreign holdings from 59.62% in the previous quarter to 46.63%.

Meanwhile, larger institutions like ICICI Bank, HDFC Bank, and the State Bank of India (SBI) faced challenges, contributing to the overall decline in the sector.

Broader Market Trends

The broader market also experienced a downturn, with the NSE Nifty 50 and BSE Sensex both trading lower by 1.01% and 0.97%, respectively. However, by mid-morning, there was a slight recovery, with the Nifty 50 down by 0.73% at 23,259.70 points and the Sensex at 76,894.21.

Future Outlook for Bank Nifty

The short-term outlook for the Bank Nifty index appears weak, based on technical indicators which suggest potential support levels at 48,400, 47,900, and 47,500. Resistance is anticipated at higher levels, specifically at 48,800, followed by 49,400 and 50,000 points, as per insights from Hardik Matalia, a Derivative Analyst at Choice Broking.

Shrikant Chouhan, Head of Equity Research at Kotak Securities, expressed that the current short-term outlook remains bleak, noting that a rally is unlikely unless there is a decisive breakthrough above 49,500 points. Matalia further supported this view by stating that a pullback might occur if the Bank Nifty successfully crosses the 49,500 threshold significantly.

Nifty, Banks, Market