Bank Stocks Post Fifth Consecutive Loss Amid Ongoing Crude Price Surge

Banking Shares Extend Losses for Fifth Straight Session

The Nifty Bank index declined by as much as 1 percent to 53,121.85 on Tuesday, marking a fifth consecutive session of losses for banking shares. This decline reflects sustained selling pressure in banking stocks amid elevated crude oil prices.

Higher crude oil prices pose a risk to the Indian economy as they can push up inflation and increase input costs. Rising inflation may limit the scope for interest rate cuts and weigh on economic growth expectations, which can affect sentiment towards banking stocks. The current scenario is exacerbated by Brent crude hovering around USD 94 per barrel. The stalled talks between the United States and Iran aimed at resolving the three-month-old conflict have kept energy prices elevated.

Most banking stocks traded in the red, with Axis Bank being the top loser on the index, declining over 2 percent. Other prominent banks such as Yes Bank, ICICI Bank, State Bank of India, Punjab National Bank, and AU Small Finance Bank also fell between 1 per cent and 2 percent.

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The Nifty Bank index has fallen more than 4 percent over the past five trading sessions. Twelve of the 14 constituents of the Nifty Bank index were trading lower. Sectoral indices also reflected this weakness, with the Nifty PSU Bank index declining 0.68 percent and the Nifty Private Bank index slipping 0.75 percent.

According to Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, the immediate support for Bank Nifty is placed in the 53,200-53,100 zone. A sustainable move below this zone could result in Bank Nifty extending its weakness towards 52,700, followed by 52,300 in the short term. On the upside, the immediate resistance for Bank Nifty is placed in the 54,000-54,100 zone.