Nifty Bank Soars to Record High As HDFC Bank, ICICI Bank’s Stellar Q4 Show Lifts Mood

Shares of banking players were glistening in the green on April 21, taking the benchmark Nifty Bank index to a record high, topping the 55,000-mark for the first time ever. The sectoral index has surged close to 7,000 points in the last three weeks to achieve this feat, with all constituents posting net gains during the period.

While there are multiple tailwinds working for the sector, today’s gains were largely fuelled by solid Q4 earnings from heavyweights HDFC Bank and ICICI Bank, which bolstered sentiment amongst investors. Both the heavyweight stocks are now trading at all-time highs, further fueling the rally in the sector.

Aside from that, other positives playing in the background include the Reserve Bank of India’s measures to shore up liquidity in the banking sector, and the two consecutive rate cuts which led to a reduction in deposit rates by banks. These measures have improved liquidity and supported bank margins, creating a favourable environment for growth. Adding to the optimism, HDFC Bank and ICICI Bank reported quarterly results that surpassed market expectations, reflecting strong credit growth and stable asset quality.

Meanwhile, with today’s surge, the Nifty Bank index has risen 14% from its March lows, driven by strong gains in stocks like IndusInd Bank and Bank of Baroda. All constituents of the index have recorded positive returns since March 11, reflecting broad-based strength across the banking sector. Nifty 50 as well as Nifty Bank heavyweights HDFC Bank and ICICI Bank soared 2% and 4%, respectively.

Choice Broking highlighted the strength seen across the broader banking space which according to the firm, reflects growing investor confidence in the sector's fundamentals.

On the technical front, the brokerage noted that Nifty Bank has formed a strong bullish candle on the daily chart. Over the past seven trading sessions, the index has surged 11%, rallying more than 5,250 points from its recent swing low. “The steady upward movement indicates aggressive buying interest and sustained bullish momentum. Analysts expect any pullbacks toward 53,600 or 53,000 to be viewed as buying opportunities by market participants,” the brokerage wrote in a note.