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Nifty Bank Slips 3%; Rbl Bank Down 7%, Icici Bank, Hdfc Bank Drag

Nifty Bank slipped 3 percent on Monday amid an overall negative trend in the market. The banking sector stocks traded lower on the NSE with 11 out of 12 scrips in the red and Bandhan Bank limiting losses.

ICICI Bank shares gained 1.5 percent in intraday trade today following a strong Q3 result. The bank’s profit after tax (PAT) at Rs 6,193.71 crore, beat Street estimates, a 25 percent jump compared to the previous quarter.

However, at the time of writing, ICICI Bank stock was trading 0.72 percent lower at Rs 798.70 despite positive commentary by brokerages.

Credit Suisse has maintained an ‘outperform’ rating on the bank’s stock with a target price of Rs 930. Another global brokerage JP Morgan kept its ‘overweight’ rating on the stock with a target price of Rs 930.

Market expert Mitessh Thakkar remains very positive on ICICI Bank. “It has hardly corrected in this decline and as long as the stock can continue to close above these levels of Rs 788-790, I will maintain a positive stance,” he told CNBC-TV18.

HDFC Bank shares remained in the red territory and declined 1.7 percent to an intraday low of Rs 1,495.70 on the NSE.

Despite the correction, several analysts remained positive on both HDFC Bank and ICICI Bank.

“Two large-cap names – HDFC Bank and ICICI Bank – are showing strength. There has been a huge bout of short-covering in HDFC Bank in the last trading session. ICICI Bank is not correcting much,” Siddarth Bhamre, Director – Alternate Investment and Research at InCred Equities said.

Market expert Prakash Diwan preferred ICICI Bank over HDFC Bank as he believes the former can rally more given the headway. He is of the view that the resets that happened between ICICI Bank and HDFC will probably get much deeper and stronger in 2022.

He referred to the comparison between the two stocks similar to what’s happening with Infosys versus Tata Consultancy Services (TCS) over the last few years. While both businesses do well, promising enough, it’s a relative strength that is being talked about, he said.

“From that perspective, I think ICICI Bank has got much more headroom to march ahead, and then you’ll see the capital come back with every subsequent quarter if the performance is likely to be what we saw yesterday, so very positive on that. And I’m sure the re-rating will continue and get stronger as compared to HDFC,” he told CNBC-TV18.

Meanwhile, after rallying 1.7 percent in early trade, IndusInd Bank shares too gave up gains in afternoon deals. The stock fell 2.7 percent from the day’s high to an intraday low of Rs 845.75.

RBL Bank was the top laggard in the Nifty Bank pack as its shares plunged almost 7 percent to an intraday low of Rs 136.50 on NSE. State Bank of India (SBI) and Axis Bank shares were down 1.7 percent and 2 percent, respectively.

Bandhan Bank stock was the only one in the green in the pack. The shares of the bank surged over 5 percent to a high of Rs 310.65 in intraday trade.

The downtrend in the banking stocks comes on a day when the market is witnessing a sharp correction with both benchmark indices Sensex and Nifty down close to 3 percent.

Meanwhile, CBS Bank stock (not part of the Nifty Bank pack) was trading 1.7 percent higher at Rs 245.50 and rallied more than 6 percent in intraday trade after Q3 earnings. The bank reported a net profit of Rs 148.25 crore, a quarter-on-quarter increase of 25 percent and its net non-performing assets (NPAs) decreased 46 percent QoQ to Rs Rs 199.74 crore.

Post the result, CVR Rajendran, CEO of CSB Bank said traction in gold loans is improving and the growth rate is expected to improve further. Gold loan growth in Q4 is likely to be much stronger than Q3 rates, he said.

First Published:  IST

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