Market experts believe that the Corona epidemic is the biggest reason for the poor performance of banking stocks, especially PSU banks.
Indian markets have been under pressure so far in April. The continued growth in Corona’s case has blurred the prospects of both the market and the economy. Banking shares have been heavily beaten in the current sell-off phase. Where the Nifty is looking down 5% from its peak of 15,431.75 in February. At the same time, Bank Nifty is seeing a decline of 15% from its peak of 37,708.75 in this period.
Public sector banks have been the most hurt in this scandal on banking shares. The Nifty PSU Bank index looks 23 percent below its peak. At the same time, the Nifty Private Bank index has seen a decline of 15 percent.
Market experts believe that the Corona epidemic is the biggest reason for the poor performance of banking stocks, especially PSU banks.
Market giants say that due to the second wave of Corona, there has been a fear among investors that companies and common borrowers will not be able to pay the loans and interest of the banks on time or in some cases default can also be seen. In such a situation, the NPAs of banks are likely to increase.
The RBI’s stress tests show that the gross NPA ratio of the country’s banking system can reach 13.5 per cent by September 2021 as against 7.5 per cent in September 2020. Along with this, it has been said that if the macro economy conditions in the country weaken further and further pressure on the banking system increases, then this gross NPA ratio can go up to 14.8 per cent.
Technical indicators on the Bank Nifty are not able to give any clear indication at this time. Shrikant Chouhan of Kotak Securities says that since the Bank Nifty’s short term outlook remains down and negative. Therefore, there is a possibility that in the Bank Nifty we may see a light pullback and Bank Nifty may be seen around 33,300.
He further said that any decline in the Bank Nifty would suggest buying with a final spotloss of 31,400 around 32,000-31,800. On the upside, light registrations can be seen for the Nifty at 32,650 and 32,970.
