Axis Bank and HDFC Bank Shares Plunge Amid Nifty Bank’s 440-Point Decline: What’s Next for Investors?

The Nifty Bank index experienced a notable decline on Friday morning, shedding approximately 440 points or 0.8%, settling at 55,611 as of 10:45 AM. This drop was primarily influenced by significant losses in heavyweight shares such as Axis Bank and HDFC Bank, which in turn negatively impacted the Nifty Private Bank and Nifty PSU Bank indices. The slide in the broader Nifty 50 index, which fell by 0.4% to 24,236, was further exacerbated by the ongoing political instability in West Asia—keeping oil prices elevated above the $100 threshold—and continued selling pressure from foreign institutional investors (FIIs) contributing to a weakened rupee.

HDFC Bank shares recorded a sharp decline of nearly 2%, trading at Rs 783.25 apiece, marking a more than 4% drop over the past month and a staggering 21% decline year-to-date. This wave of selling can be largely attributed to the recent departure of Chairman Atanu Chakraborty, a move that has raised concerns among investors regarding the bank’s internal governance. Axis Bank shares followed suit, declining by over 1.5% despite the company’s announcement of a $500 million offshore loan agreement with Mitsubishi UFJ Financial Group. Other notable declines included Federal Bank and Union Bank of India, both falling over 1%, while several other major banks like ICICI Bank and Kotak Mahindra Bank also experienced marginal losses.

In light of these developments, analysts are closely monitoring key technical levels for the Nifty Bank index. Bajaj Broking has indicated that the previous session showed a high wave candle structure, suggesting potential consolidation with a positive bias if the index can maintain levels above 55,000. Current resistance is observed at 56,280 and 56,550, while the first support level now sits around 55,720, with a further level at 55,400. Given the index’s current positioning at 55,611, it has already breached suggested support levels, warranting close attention from investors in the weeks ahead, particularly in light of upcoming financial disclosures from SBI and Bank of Baroda.

Source: The Economic Times

(Expert Note: This report was prepared by the Wealthova team.)