Sector Spotlight: Investors with short term view must bank on financials; buy ICICI Bank, Axis Bank, Kotak Mahindra Bank, says analyst

Sector Spotlight: Banking and financial sector stocks outperformed their peers from other sectors on Tuesday. The markets ended on a weaker note for the second straight session with the BSE Sensex closing down at 58,576.37, down by 388 or 0.6 per cent. Meanwhile, the Nifty50 ended at 17,530.30, down by nearly 1 per cent.

The banking and financial stocks are expected to trade positively when the markets reopen today. Analyst Nilesh Jain remains bullish on the sectot and sees a considerable upside in the banking stock, especially private banks.  

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Nifty Bank, which ended at 37,747.40, up almost 0.4 per cent from the last closing level is poised for a further upside, Jain said.  Jain is Assistant Vice President (AVP), Equity Research Technical and Derivatives at Centrum Broking. 

The analyst said that the technical charts suggest a strong upward move in the Nifty Bank Index stocks and the index could test levels around 39,000 over next week. He sees a support at 37,300 while an immediate resistance of 38,000. It is trading at levels, close to the breakout level, Jain said.

He recommended three stocks to buy with a short term view.

ICICI Bank: Buy| CMP | Target: Rs 764| Stop Loss: Rs 745| Upside 10%

This remains a top bet for this analyst and a conviction call. Jain said that the second largest private bank will lead the Nifty Bank index, he further said. The stock has been trading in a rising channel which indicates an upside, he said. It has been an outperformer among its other banking peers and has been doing well despite ongoing upheavals in stock markets.

Axis Bank: Buy| CMP 798 | Target: Rs 830/850| Stop Loss: Rs 770| Upside 10%

It has a pattern similar to the ICICI Bank on charts, the AVP said. It has witnessed a breakout and is now a strong momentum play.

Kotak Mahindra Bank: Buy| CMP 1805 | Target: Rs 1900| | Stop Loss: Rs 1740| Upside 10%

This stock has been an underperformer in this segment and has been trading in a falling channel, Jain said adding that the overall chart structure now looks positive.

(Disclaimer: The views/suggestions/advises expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)