Nifty Bank Falls in Market Correction; Major Banks Struggle

The Nifty Bank index has recently faced a downturn in line with a broader market correction, showing signs of vulnerability among major banking stocks. As of January 13, 2025, around 10:33 AM IST, the Nifty Bank index registered a decline of 0.44%, which is slightly more significant than the 0.42% drop observed in the Nifty 50 index.

Market Overview

Among the 12 banks included in the Nifty Bank sector, only ICICI Bank, IDFC First Bank, and IndusInd Bank managed to remain in positive territory during this correction. The Nifty Bank opened at 48,264 points and experienced a drop to a day’s low of 48,116 points—the lowest point seen since June 2024.

IndusInd Bank Stands Out

IndusInd Bank was a standout performer with its stock rising nearly 3%. This increase followed the announcement regarding its shareholding data for the December 2024 quarter, where foreign holdings fell to 46.63%, down from 59.62% in the previous quarter. This trend of decreasing foreign ownership has persisted for over five quarters.

Decline of Major Banks

Conversely, major banks like HDFC Bank and ICICI Bank, along with State Bank of India, faced declines that heavily impacted the sector's performance.

Broader Market Trends

The overall market condition has been weak, with both the NSE Nifty 50 and BSE Sensex opening dramatically lower at 1.01% and 0.97%, respectively. Despite this initial decline, there was a slight recovery by mid-morning, with Nifty 50 trading down by only 0.73% at 23,259.70, while the Sensex was at 76,894.21.

Outlook for Nifty Bank

The short-term outlook for the Nifty Bank appears uncertain. Technical analyses suggest potential support levels at 48,400, 47,900, and 47,500 points. A crucial resistance level is identified at 48,800, with additional resistance anticipated at 49,400 and 50,000 points. Hardik Matalia, a Derivative Analyst, mentions that a decisive break above the 49,500 mark could lead to a rally.

Expert Opinions

Shrikant Chouhan, Head of Equity Research at Kotak Securities, echoes this analysis, suggesting that the market sentiment remains weak at present with chances of recovery only following significant upward movement above the 49,500 threshold. Matalia reinforces this view, indicating that a consistent climb past this level may lead to a turnaround for the Bank Nifty.

Nifty, Bank, Market