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Buzz in banking stocks amid reports of another RBI rate cut; ICICI Bank, SBI rally

IBTimes India 2019-04-16 10:00:40

Reports that the Reserve Bank of India (RBI) is considering another repo rate cut to improve the economy's liquidity during the ongoing general election 2019 have set the banking stocks abuzz. Nifty Bank took off on a strong rally early on Tuesday, trading at 30,371, gaining 0.89 percent in the first hour of trading. Nifty Bank is headed to the 52-week high of 30,648 set on April 1, 2019.

ICICI Bank is leading the early rally with a 2.86 per cent gain in the first half hour, topping 404 close to the one-year high of 409, after yesterday's close of 393. The ICICI Bank is far out of the muddle in which it found itself on account of the row ignited by the Chanda Kochhar episode. State Bank of India (SBI) has gained 0.81 per cent to trade at 318 after yesterday's close of 315.

Market observers suggest a buy for most banking stocks, especially for HDFC Bank, which is in a slight correction mode after a consistent rally over the past few weeks. HDFC Bank is trading 0.30 per cent down at 2,282 after opening the day at 2,290. The scrip closed yesterday at 2,279.

Kotak Mahindra Bank, which formed a tall candle on the daily chart yesterday to close at 1,373 has been trading sideways in the first hour after opening at 1,382 and is likely to find new upward momentum as the stock has good volume support.

Nifty 50 has set a new all-time high of 11,763 points after taking a breather since coming off the high of 11,761 on April 3, 2019. The 50-scrip benchmark index has since been trading above 11,761, largely propelled by banking, metal, auto, financial services and FMCG sectors.

The IT stocks that were buzzing for the previous few days seem to have taken a break on Tuesday, but there must be more upside for stocks like Wipro, TCS, and Mindtree. There could be more life in some stocks like Infosys and Tata Elxsi, which may be looking for consolidation after their last rally. Wipro, whose FY19 Q4 results are scheduled for Tuesday, has been rapidly gaining traction since a recent low of 253 on March 26, 2019, after coming off the 52-week high of 291 on March 26, 2019. The market is watching the guidance accompanying the results, which are expected to be better than predicted.