Indian equity indices shed 1% during Friday’s trade. The Bank Nifty declined most among the key indices, falling 1.9% to a day’s low of 48,309.50. In fact, the overall banking stocks are under pressure and experts believe that Axis Bank numbers kindled caution amongst investors and triggered negative sentiment.
Bank Nifty is in a downtrend forming lower tops and lower bottoms on the daily charts, said Jatin Gedia, Technical Research Analyst at Mirae Asset Sharekhan. “The counter-trend pullback which was going during the previous three trading sessions has faced resistance at the 49400 – 49500 zone and resumed its downtrend towards the support zone – 48000 – 47900. The sharp negative reaction to the quarterly results of Axis Bank and considering its weightage in Banking Nifty, the fall appears sharp. The other private sector banks like ICICI Bank, and Kotak Bank are trading with a negative bias below its crucial short-term moving averages which is in turn putting pressure on the bank nifty,” he added.
The NSE compiled Nifty 50 has fallen 0.9% to an intra-day low of 23,100.35, holding the key support level. The S&P BSE Sensex dropped 1% to quote at 77,042.82. Here are 3 reasons why Bank Nifty in under pressure today-
Bank Nifty on a downward trend
The Bank Nifty has been falling since it reached a high of around 53,800 in early December, losing 11% in just 1.5 months. Ruapk de, Senior Technical Analyst at LKP Securities explained that, “One of the primary reasons for this decline is its inability to move beyond the previous swing high of 54,467, which triggered significant profit-taking in the index. The initial sell-off resulted in a breakdown below a consolidation pattern on the weekly chart, further amplifying negative sentiment. Additionally, the index fell below the crucial 50-EMA on the weekly chart, which added to the bearish outlook. To compound the situation, the momentum indicator had entered a bearish crossover during this period. These technical factors collectively contributed to the significant decline in Bank Nifty.”
Axis Bank Q3 earnings a negative sentiment
Private banks’ stocks were the major losers in the Nifty 50 on Friday. On Thursday, Axis Bank reported its quarterly results for the third quarter of FY25. The bank’s slippage continues due to unsecured lending to retail borrowers across vintages in the lack of appropriate seasoning.
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