HDFC Bank pulls Bank Nifty up, index opens with a gap-up

It’s a second day of relief to the Indian stock markets where benchmark indices have gained exuberantly after a sharp fall of seven consecutive sessions. Nifty and Sensex opened with gap-up of 33 and 42 points, respectively on Friday. Barring PSU Bank sector, which is marginally down, all other sectors are trading in green, where Bank Nifty too is almost 1 per cent up after reporting an open-low at Rs. 25145.50.

HDFC Bank which holds 33.6 per cent weightage in Bank Nifty, is the top gainer in the index at 1.6 per cent gains. Credit Suisse raised its target by 6 per cent to Rs. 2.075 amid expected value acceleration because of stable margins and improvement in asset quality. Further, ICICI Bank and IndusInd Bank which hold 17.5 and 7.5 per cent in the index surged 1 per cent plus. However, SBI which holds 10.5 per cent weightage is down 0.7 per cent which has refrained Bank Nifty from gaining further.

Technically, Bank Nifty had given a robust trendline breakout on November 1 with a gap up opening. Thereafter the index witnessed a gradual upbeat with much of consolidation at higher levels. After hitting an all-time high at 25953, index tumbled sharply by 4.4 per cent, but up to the trendline level on December 06 which acted as a major support. Thereby, going forward Bank Nifty can test 25385-25520 levels in the first place and 25700 would act as the trend reversal for the index. Oscillators’ positive crossover too suggest some more upside. On the downside though, 24,800 would act as the supports followed by 24560-24290.