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Nifty Bank Jumps 3.5% On Analysts Optimism; Axis Bank Gains 8%, SBI Up 4%

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After brokerages exuded confidence in the banking space, Nifty Bank in trade on August 28, 2020 surged as much 3.5% to day's high of 24438.75 as against previous close of 23600.35. Global brokerage firm UBS in a report said the economy is showing signs of gradual recovery, as evident from the high frequency data, thereby reducing risk pertaining to bad loan creation.

Nifty Bank Jumps 3.5% On Analysts Optimism; Axis Bank Gains 8%, SBI Up 4%
 

"The recent capital infusion (over US$10bn) in some banks/non-banking financial companies (NBFC) would be additional cushion. We cut our FY21/FY22 estimates for GNPL formation from 7%/5% to 4%/5% of loans. Bank stocks are down 12-62% YTD and have underperformed the broader markets. We think the sector's downside risks are limited," said UBS in a recent report.

Furthermore, IIFL Securities in a report today on F&O expiry said that Bank Nifty index outshined the Nifty index by a staggering 5 per cent, reversing the underperformance of the previous series, with both the indices closing 9 per cent/4 per cent higher.

The optimism on the sector lifted bluechip financial stocks both from the public and private space with Axis Bank gaining as much as 8%, ICICI Bank up 5% and SBI moving higher by up to 4% in intra-day trade.

Meanwhile, Nifty PSU Bank index jumped as much as 5% intra-day, while Nifty Private Bank index also gained up to 3.5%. In comparison, the benchmark indices Nifty soared up to 1% hitting day's high of 11686.

GoodReturns.in

Story first published: Friday, August 28, 2020, 13:39 [IST]
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