Bank Nifty Declines for Second Day Amid Persistent Foreign Outflows, Led by PSU Bank Losses

Bank Nifty Falls for Second Straight Day Amid Concerns Over Foreign Outflows

The Bank Nifty index declined for the second consecutive day on April 23, weighed down by concerns over persistent foreign outflows. The index was trading 1.4% lower at 56,400 in the afternoon session, with PSU banks such as Union Bank of India, Bank of Baroda, and Canara Bank leading the losses, down 6%, 2.62%, and 2.6%, respectively.

The decline in Bank Nifty comes as foreign investors have continued to offload Indian shares, with net sales worth $4.3 billion in April and $18.5 billion so far in 2026. On April 22, a rare occurrence took place where both Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) were net sellers in the cash segment, booking profits after the recent market rally.

Union Bank of India shares declined after the PSU bank reported a 6% year-over-year (YoY) rise in net profit in the March quarter. However, its provisions increased 227% to Rs 1,055 crore on a sequential basis. The decline in the bank's shares weighed on the Bank Nifty index.

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A renewed surge in oil prices sent the rupee down past the 94 per dollar mark to its weakest level in more than three weeks on Thursday, deepening the negative sentiment on the currency. The rupee fell to 94.1525, its weakest level since March 30, in early trading, before paring losses to 94.04, down 0.26%.

The Reserve Bank of India (RBI) on Monday withdrew restrictions imposed on April 1 that barred banks from offering non-deliverable forwards to clients. It also removed curbs on corporates rebooking cancelled foreign exchange contracts. Higher crude prices could lift borrowing costs, push bond yields up, and compress treasury gains of PSU banks.

Resistance is placed near 57,000-57,200, while support is seen around 56,200-56,000. Continued strength in private banking stocks will be crucial for further directional move, said Aakash Shah, Technical Research Analyst at Choice Equity Broking Private Limited.

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On the daily timeframe, the index formed a Doji-like candlestick pattern, indicating indecisiveness among market participants. This reflects a balance between buyers and sellers and suggests that a breakout on either side may determine the next directional move. From a technical perspective, immediate support is placed in the 56,800-56,900 zone, while resistance is observed in the 57,450-57,550 range, said Sachin Gupta, VP-Research at Choice Broking.