Investors bank on larger lenders, again
Bank shares jumped on Tuesday, emerging as the top gainers in the day's trading, as investors lapped up shares of some larger lenders amid uncertainty over near-term market prospects.
The Nifty Bank index advanced 2.1% on Tuesday, while the benchmark Nifty gained 0.5%. Ten of the 12 stocks on the Nifty Bank index gained at close on Tuesday. Federal Bank was the biggest gainer, soaring 8.5% after its second-quarter results exceeded expectations. SBI was up 5% and ICICI Bank gained 3%.
Analysts said that appetite for large-cap bank stocks, which have the highest weightage on the Nifty and Sensex, despite second-quarter earnings of several smaller lenders disappointing the market is part of an investor strategy to spread risks.
«The banking sector has seen some recovery as investors have shown fresh buying interest to diversify risks after the correction seen across segments,» said Aamar Deo Singh, senior vice president of research at Angel One. «This is a defensive move by smart money which has led to movements in large-cap names like ICICI Bank, SBI and HDFC Bank.»
The Nifty Bank index has declined 2.8% in past month, compared to Nifty's fall of 6.5%. SBI was up 3.74%, Federal Bank gained 3.61%, ICICI advanced 1.93%, and HDFC Bank remained unchanged in this period. IndusInd Bank fel 29% in this period, while Axis Bank is down 6.78%.
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