Bank Nifty Experiences Worst Month Since COVID-19: Analysts Identify Key Support Level

Bank Nifty Index Experiences Steepest Monthly Decline Since Covid-Led Selloff

The Bank Nifty index, a key benchmark for the country's banking sector, has logged its steepest monthly decline since the Covid-led selloff. The decline has raised concerns among analysts, who have flagged the 49,800–49,500 zone as a key support level going forward. The banking index fell 3.82 percent to close at 50,275.35, its lowest level since April 9, 2025.

The Bank Nifty has continued to extend losses, breaching its previous swing low of 51,324 recorded on March 23. This indicates a continued weakness in banking stocks. The decline has also led to a decisive breakdown from the prior consolidation zone, as evident from the weekly chart.

Monthly Performance of Bank Nifty Index

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The sharp fall in the Bank Nifty index reflects a lack of support from heavyweight banking stocks, which dragged the index lower. Bank Nifty ended FY26 with a loss of 2.50 percent, highlighting its underperformance in the latter part of the year.

According to analysts, the immediate support is placed in the 49,900–49,800 zone. A sustained move below this could extend the decline towards 49,500 and then 49,200 in the near term. On the upside, the 50,600–50,700 range is expected to act as immediate resistance.

Technically, the index slipped below the 78.6 percent Fibonacci retracement of the rally from the March 2025 low to the February 2026 high and formed a long red candle on the daily chart after a gap-down opening, signalling continued weakness.

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In Monday's trade, Union Bank of India was the top laggard, falling 6.55 percent to Rs 163.99 per share on the NSE. Canara Bank and Bank of Baroda declined 5.37 percent and 4.88 percent, respectively. Among heavyweights, HDFC Bank ended 3.26 percent lower, while State Bank of India fell 3.93 percent. All 14 constituents of the banking index closed in the red.