Bank Nifty makes new highs. 5 stocks preferred by experts

According to stock market experts, this rally in banking stocks may continue further as margins of banks are expected to improve in short to medium term after overseas lending going dearer for big corporates in comparison to Indian lending agencies. Apart from this, lowering of provisioning has also aided balance sheet of the banks. 

On banking stocks to buy in current rally, they advised investors to look at those banks which have lower cost of lending and they should govern an edge over their peers in terms of IT-enabled lending. They advised investors to buy stocks such as State Bank of India (SBI), Bank of Baroda, Canara Bank, Axis Bank and ICICI Bank.

Speaking on the reason for Bank Nifty hitting record high, Saurabh Jain, AVP — Research at SMC Global Securities said, “Reason for rally in Bank Nifty can be attributed to three major reasons — hawkish interest rate regime making overseas lending dearer for big corporates in comparison to Indian lenders, rising interest rate expected to improve margins of Indian banks and lowering of provisioning strengthening the balance sheet of banking institutions. Today, incremental credit ratio of Indian banks are more than 100 that is also attracting buying interest among Dalal Street bulls.”

On Bank Nifty current chart pattern, Sumeet Bagadia, Executive Director at Choice Broking said, “Bank Nifty has made higher high higher low pattern on chart that signals continuous uptrend in the index. Immediate target for Bank Nifty index is 44,000 but once it gives closing above 44,000, we can expect more upside in the index.”

On bank stocks to buy today Saurabh Jain of SMC said, “In current rally, one should look at those banking stocks that has an edge over its peers in terms of IT-enabled lending and it should have lower lending cost in comparison to its peers. On this parameters, I would suggest Axis Bank, ICICI Bank, Bank of Baroda, SBI and Canara Bank shares to buy in current rally.”

Sumeet Bagadia of Choice Broking said that ICICI Bank shares can go up to ₹980 to ₹1000 apiece levels in short term whereas SBI shares may go up to ₹640 apiece levels in this time horizon. He advised investors to buy Axis Bank, Canara Bank and Bank of Baroda stocks for the respective target of ₹950, ₹360 and 200 apiece.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.