Bank Nifty Plunges 2.5% Amid Crude Price Surge Above $100, PSU Banks Lead Losses

Banking and Financial Shares Decline Amid Concerns Over Inflation and Monetary Policy

Banking and financial shares experienced a decline on Monday, with the Bank Nifty index plummeting over 2 percent. This sharp drop was largely attributed to concerns over elevated crude oil prices, which raised the specter of inflation and tighter monetary policy.

The PSU banks led the losses, with some stocks plummeting up to 4 percent. The Nifty Bank index underperformed the benchmarks, dropping about 2.8 percent intraday. It fell 1,556.55 points to hit a low of 54,356.20, making it among the worst-performing sectoral indices during the session.

A breakdown of the sectoral indices reveals the extent of the decline:

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Among individual stocks, State Bank of India was the top laggard on the Bank Nifty index, declining up to 2.5 percent. HDFC Bank and IndusInd Bank also fell up to 2.47 percent and 1.85 percent, respectively.

In the PSU banking space, Union Bank of India, Bank of India, Bank of Maharashtra, and Punjab National Bank declined up to 4 percent. In the private banking pack, HDFC Bank, Axis Bank, and Kotak Mahindra Bank were among the major laggards, falling up to 2.5 percent.

Market analysts expect the banking index to retest its long-term moving average (200 DEMA) near 56,700, followed by a move towards 57,800. On the downside, the short-term moving average (20 DEMA) is expected to act as the first support at 54,300, followed by a support level near 53,000.

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