Banking stocks were on shaky ground on June 4 as investors rushed to book profits after yesterday’s record highs. Shares of Bank of Baroda, PNB, SBI, Bandhan Bank, Axis Bank, and IndusInd Bank, among others, slipped up to 9%, compared to a 5% decline in the Bank Nifty index.
The overall market sentiment also deteriorated after the NDA-led coalition secured fewer seats than exit polls had predicted, while the opposition I.N.D.I.A coalition exceeded expectations.
Analysts remain optimistic about financials going forward, amid hopes for policy continuity, sustained focus on capital expenditure, and fiscal consolidation. “We remain overweight on financials such as SBI, BoB, ICICI Bank, LIC Housing Finance, Shriram Finance, HDFC AMC, ICICI Prudential, and ICICI Lombard,” said Morgan Stanley.
Jefferies also remains positive on private financials such as HDFC Bank, IndusInd Bank, and Kotak Mahindra Bank, citing attractive valuations.
So far this year, Bank of Baroda, SBI, Axis Bank, ICICI Bank, Indian Bank, and Canara Bank have surged in the range of 10-46%, compared to a 5% climb in the Bank Nifty index.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
