Market Performance
The Nifty Bank index bounced back nearly 1% intraday on Tuesday, recovering from a mild loss in the previous session. After dropping 0.18% on Monday, the index reclaimed most of its losses, continuing a strong run that saw it rise in five of the last six sessions.
Banking sector sentiment was lifted as investors reacted to December quarter business updates, positioning themselves ahead of the earnings season starting January 12.
Main Movers in the Banking Sector
- ICICI Bank emerged as the day’s top performer, climbing up to 3%.
- Union Bank of India and IndusInd Bank followed with gains of 2.55% and 1.9%, respectively.
- Other key banks including State Bank of India, Axis Bank, Canara Bank, and Yes Bank rose by as much as 1.5%.
In contrast, HDFC Bank lagged behind. The stock touched Rs 956, marking its lowest level in over three months, after falling more than 4% over the last two sessions.
HDFC Bank: Slower Momentum
Despite being the largest private sector lender, HDFC Bank’s growth in Q3 showed a measured pace:
- Loan growth: 11.9% YoY
- Deposit growth: 11.5% YoY
While the Nifty Private Bank index rose 0.5% intraday, HDFC Bank remained the biggest laggard, reflecting cautious investor sentiment.
Axis Bank: Strong Gains and Business Growth
Axis Bank recorded its biggest gain since July 19, 2024, powered by solid performance in the December quarter:
- Gross advances: +14.1% YoY
- Total deposits: +15% YoY
The bank’s growth was broad-based, showing strength in both advances and deposits, which helped lift investor confidence.
IndusInd Bank: Sequential Loan Decline
IndusInd Bank continued to face challenges in loan growth, reporting a sequential decline in loans for the fourth consecutive quarter. This points to a cautious phase in the bank’s expansion trajectory.
- Despite the slowdown, shares gained 1.9% on the day, indicating investor optimism in potential business consolidation and recovery in future quarters.
Summary of Banking Sector Trends
The intraday recovery in Nifty Bank reflects a sector-wide balancing act:
- Strong performers: ICICI Bank, Axis Bank, Union Bank, IndusInd Bank
- Moderate gainers: SBI, Canara Bank, Yes Bank
- Lagging: HDFC Bank
Key takeaways from the day’s trading:
- Investors are responding to quarterly business updates rather than broader market movements.
- Loan and deposit growth remain the primary focus for private sector lenders.
- HDFC Bank’s slower growth contrasted with the upbeat performance of other banks.
Overall, the banking sector showed resilience, with several large lenders posting solid gains, while some stocks reflected the cautious pace of business expansion.
Source: Moneycontrol
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