Nifty Bank Index Surges Significantly from Day's Lows

The Nifty Bank index experienced a significant recovery during the midday session on the expiry day, primarily driven by strong performances from major banks like HDFC Bank, ICICI Bank, Kotak Mahindra Bank, and SBI Bank.

This high-volatility index has trended upward for five consecutive days, showing remarkable strength by increasing as much as 3.35 percent, equivalent to 1,971 points during this period.

Earlier today, financial expert Anil Singhvi remarked on the resilience of the banking index as it moved towards a critical milestone ahead of the Reserve Bank of India's (RBI) bi-monthly monetary policy announcement set for the following day. He noted that the index has successfully broken above the important 53,000 level.

Moreover, there is speculation among market experts that the RBI may consider lowering the Cash Reserve Ratio (CRR) to enhance liquidity in the banking system, with around 60 percent of respondents expecting a potential reduction in the CRR. The CRR represents the minimum reserve requirement that various banks must maintain to ensure liquidity.

In addition to this, some analysts foresee a cut in the policy rate, which could further boost the banking sector.

Singhvi emphasizes that the closing of the Nifty index today is crucial, particularly if it ends above the 52,650 threshold. He also believes that if the Nifty Bank surpasses 53,400, the market could see additional upward movement.

At the time of this report, the Nifty Bank was recorded at a 0.92 percent increase, poised at 53,755, suggesting it might close above the highlighted level.

Technical Analysis of Bank Nifty

According to Jigar S. Patel, Sr. Manager of Equity Research at Anand Rathi, the Bank Nifty index has shown significant upward momentum, breaching the crucial resistance zone between 52,500 and 52,600. This breakout represents a powerful bullish signal, indicating that the market is gaining positive momentum and is likely to continue its upward path.

He also mentioned the emergence of an inverse head and shoulders pattern on the daily charts, which is traditionally seen as a bullish reversal signal. This pattern indicates that after a phase of consolidation or decline, the market is likely set for an upward rally. The failure to maintain upward momentum after this breakout might indicate a shift in market sentiment.

Going forward, the index is expected to find support at levels of 52,800 followed by 52,500, areas where buying interest is likely to reemerge and prevent substantial declines. Conversely, resistance levels may appear around 53,500 and 54,000, where selling pressure could complicate further gains unless buying strength remains robust. Overall, this technical outlook suggests a positive trajectory for Bank Nifty, provided it remains above the significant support levels.

Nifty, Bank, Index