Bank Nifty records biggest single-day gain in three months

By: | Updated: August 28, 2018 2:33 AM

The Bank Nifty index on Monday recorded its biggest single-day gain in three months after renewed buying interest pushed most of the banking stocks up.

(Image: Wikimedia Commons)

The Bank Nifty index on Monday recorded its biggest single-day gain in three months after renewed buying interest pushed most of the banking stocks up. Shares of ICICI Bank advanced nearly 3% on Monday while Kotak Mahindra Bank rose 1.6%. State Bank of India (SBI) shares gained 2.5%.

The stocks that have powered the Bank Nifty are HDFC Bank, Kotak Mahindra Bank and ICICI Bank. These three banks together have contributed nearly 75% of Bank Nifty’s gains of 2,725 points in 2018. On Monday, the Bank Nifty gained 429.50 points, or 1.5%, to close the session at 28,264.20, which is 56 points away from its record high of 28,320.

Since the beginning of 2018, the gauge for bank stocks has gained 10.7% against the broader Nifty 50’s gain of 11%.

However, the Bank Nifty managed to outdo the broader Nifty 50 in three out of four years through 2017. While Bank Nifty rallied 40.5% in 2017 and 7.4% in 2016, the Nifty50 gained 28.7% and 3.01% in the same period. Monday also saw the Nifty PSU bank index rising 2.2% to close the session at 3,283.90 – its highest level since August 21 as State Bank of India and Bank of Baroda powered the rally. With Monday’s gain the gauge for state-owned lenders, rallied close to 22% from its mid-July low of 2695.40 points.

The inclination towards PSBs gained momentum on Monday after a media report indicated that the banks are in the process of closing, or rationalising, about 70 overseas operations as part of capital conservation exercise.

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