Nifty Bank slips to 6-months low; Bandhan, City Union, DCB Bank hit 52-week lows as bank stocks fall remans unabated

The market sentiments weakened on Monday as all major indices traded in the red. As the cases related to Omicron,  are rising in the country, the investors' sentiment towards the market, especially banking stocks, took a hit. The 12-share Nifty Bank plunged 6-month low after tumbling over 4 per cent, below 34500-mark in the intraday trade. 

Moreover, the banking index is also trading below 200-day EMA (Exponential Moving Average), as the bank stocks in the 12-pack plummeted up to 10 per cent intraday, with AU Small Finance Bank declining most, followed by Bandhan Bank, RBL Bank and Federal Bank on Monday. 

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Individually, heavyweights like IndusInd Bank, ICICI Bank, HDFC Bank, State Bank of India and Axis Bank along with IDFC Bank each slipped between 4-5 per cent. Similarly, Bandhan Bank, City Union Bank, and DCB Bank shares have touched their respective 52-week lows on the bourses on Monday. 

The benchmark indices — Sensex and Nifty — witnessed biggest sell-off led by foreign institutional investors, along in the December till December 17, over Rs 17000 FII outflows is seen by market. Besides, the rising cases of Omicron, up nearly 166 cases in India is weakening the overall sentiment. 

Meanwhile, a spike in global inflation threatening the economic recovery with UK central bank being the first major bank from advanced economy to take a rate hike. The banking stocks are also reeling under pressure due to rate hike concerns globally and domestic.  

Fear of another lockdown or restrictions will not only hurt the already reviving economies but will increase the bottlenecks pushing the economies to several years down, Ravi Singh Vice President & Head of Research said in his mid-market comment.

“Another major reason behind this unabated selling is the measures taken towards policy tightening and reducing liquidity by major central banks to curb the rising inflation. Higher rates in the major markets may force the FII outflow from emerging markets,” the market analyst Singh added. 

At around 02:41 pm; Nifty Bank index was trading below 3.6 per cent to 34,366-mark as compared to 2.57 per cent decline in the benchmark index Nifty50. 

Trading lower for the sixth straight day, the banking index has declined 8 per cent during the period. Nifty Bank has corrected almost 19 per cent as compared to 12 per cent fall in Nifty50 from its 52-week high level of 41,830 hit on October 25, 2021.