The stocks of IDFC, Axis, ICICI, and other banks and financial services companies increased during Monday’s morning trading. The RBI’s liquidity boost initiatives improved market sentiment.
IDFC first, Axis, ICICI, HDFC, Other Bank and Financial Services:
The stocks of IDFC First Bank, Axis Bank, ICICI Bank, and other financial institutions increased during Tuesday’s morning trading. The RBI’s liquidity boost initiatives improved market sentiment.
The Nifty Bank Index increased by over 1%, with the share prices of AU Bank, IDFC First Bank, HDFC Bank, Axis Bank, ICICI Bank, and other banks rising by up to 3%.
The benchmark Nift50 Index recovered up to 0.6% in early trading, driven by the share prices of HDFC Bank and ICICI Bank climbing more than 2%. The index was also driven by Bajaj Finance and Bajaj Finserv, which had more than 1% increases.
The Nifty Financial Services index also increased by almost 1.4% in the early sessions. Cholamandalam Investment and Finance Company Ltd. led the gains, as its share price increased by nearly 3%. After Bajaj Finance and Bajaj Finserv, LIC Housing Finance Ltd. was another notable beneficiary.
RBI Liquidity Measures:
After assessing the current financial and liquidity situation, the Reserve Bank of India has decided to take several steps to increase the amount of liquidity in the banking industry.
Among these are the Reserve Bank’s OMO purchase auctions of Government of India securities for a total of ₹60,000 crore, which will be held in three tranches.
Next month, a Variable Rate Repo (VRR) auction will be held. Next month, there will be a 56-day VRR auction with a notified value of ₹50000 crore. Additionally, on January 31, a six-month dollar-to-rupee purchase-sell swap of $5 billion is scheduled.
Tuesday saw a strong recovery for the Bank Nifty. However, analysts like Shrikant Chouhan, Head of Equity Research at Kotak Securities, believe the negative sentiment will continue if Bank Nifty stays below 49000. On the downside, it can drop to between 47,500 and 47,200. The 20-day Simple Moving Average (SMA), or even 49,500, might see a comeback if it breaks above 49,000.
