Bank Nifty rollovers surge
₹1,434.90. Tepid results by Kotak Bank, IndusInd and Axis Bank have added to the bearishness as the results came in-line, or below Street expectations. Heavy selling in banking stocks dragged down the weightage of financial services sector on the Nifty 50 to 33.43% on 18 January from 35.26% on 29 December.
HDFC Bank was hit the most, with its weight falling to 11.9% from 13.52% in the comparative period. Kotak Bank’s weight slipped to 2.79% from 2.95%. This has caused huge shorts to be rolled over to the February series of derivatives.
But the Bank Nifty recovering from below its 200-day simple moving average of 44709.85 to 44866.15 at closing on Thursday and the fact that HDFC Bank and its peers like Kotak Bank and Axis Bank have also corrected is indicating that prices could be turning attractive for buyers. “We have seen shorts being rolled over in banking and tech," said Shrey Shah, global asset allocator, Ashika Global Family Office Services. “However, out of all these sectors, I believe that the banking sector will experience short-covering very soon, indicating upside movement." Tracking the market sentiment, Shah explained that the one-sided rally in benchmark indices in November and December last year, tracked a global market rally, on hopes of four rate cuts by the US Fed in 2024.
However, the forecasts of rate cuts have moderated, on fears that inflation in the US could remain higher for a longer . “Therefore, we are seeing a decline in the Asian stock market along with the Indian market. Also, due to the upcoming budget, the market looks choppy and we may see the Nifty trading between 20800 and 21800.
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