06 Sep 2024 BankNifty has fallen only 694pts, calling the bears
BankNifty Stance Neutral ➡️
BankNifty has lost only 694pts ~ 1.35% over the last week and interestingly 896pts drop came on Friday, 6th Sep. Our stance has been neutral for quite some time now and prefer to stay neutral until 49728 is not getting taken out.
The daily candle of BN is quite different than Nifty. BN did not even retrace the top that it made on 4th July, whereas Nifty had gone past that level. Honestly, there is something that is bothering the banks. The news that the deposit growth is slowing could be one reason. My opinion is that our deposit rates are much higher and were raised much lower proportionately than in the US. At 6.5%, the repo rate is no longer attractive and is seducing the depositors to withdraw and park in riskier asset classes like Mutual funds.
Then there is the news from what is happening in SEBI. The employees are protesting demanding better working conditions and obviously, the highlight is the corruption allegations of the SEBI Chief.
The problem is that such allegations even if not true will impact the credibility of the Indian equity ecosystem, especially from a foreign investor point of view. If the allegations are true, then many companies will face the heat and among that, the biggest losers will be banks.
Any company that has pledged its shares with the banks and if it is taken down, will drag the banks along with it. With dropping prices, the companies may face margin calls and banks will bear the heat. The main reason banks are reluctant to go up could be due to this reason.
The first main support comes at 48947 and I hope we do not go there this week itself.
BankNifty has lost only 694pts ~ 1.35% over the last week and interestingly 896pts drop came on Friday, 6th Sep. Our stance has been neutral for quite some time now and prefer to stay neutral until 49728 is not getting taken out.
The daily candle of BN is quite different than Nifty. BN did not even retrace the top that it made on 4th July, whereas Nifty had gone past that level. Honestly, there is something that is bothering the banks. The news that the deposit growth is slowing could be one reason. My opinion is that our deposit rates are much higher and were raised much lower proportionately than in the US. At 6.5%, the repo rate is no longer attractive and is seducing the depositors to withdraw and park in riskier asset classes like Mutual funds.
Then there is the news from what is happening in SEBI. The employees are protesting demanding better working conditions and obviously, the highlight is the corruption allegations of the SEBI Chief.
The problem is that such allegations even if not true will impact the credibility of the Indian equity ecosystem, especially from a foreign investor point of view. If the allegations are true, then many companies will face the heat and among that, the biggest losers will be banks.
Any company that has pledged its shares with the banks and if it is taken down, will drag the banks along with it. With dropping prices, the companies may face margin calls and banks will bear the heat. The main reason banks are reluctant to go up could be due to this reason.
The first main support comes at 48947 and I hope we do not go there this week itself.
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