Private banks gain up to 4%; Axis, ICICI hit new highs; HDFC nears summit

At 02:04 pm; Nifty Private Bank index was up 1.7 per cent, as compared to 0.65 per cent rise in the Nifty 50 and 0.20 per cent gain in Nifty PSU Bank index.

Shares of private sector banks were in focus and rallied up to 4 per cent on the National Stock Exchange (NSE) in Tuesday’s intra-day trade as analysts believed these banks should now give better returns given a good business outlook and inexpensive valuations.

HDFC Bank, ICICI Bank, Axis Bank and City Union Bank were up in the range of 2 per cent to 4 per cent. Of these, Axis Bank (up 3.2 per cent at Rs 1,267.50) and ICICI Bank (up 2.5 per cent at Rs 1,199.70) were trading at their respective record highs.

With less than three days to go for the June series expiry, the Nifty Put Call Ratio (PCR) stood above 1; indicating presence of more put writing as against call writing. The highest OI was visible in 24,000, 24,500 and 25,000 Strike Calls.

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Similarly, traders seemed to be a confident lot, with steady stock futures rollovers to the July series.

Private Banks lead: Shares of private lenders which were seen underperforming state-run peers seem to be back on investors' radar. Banking shares hold significant weightage in the benchmark indices - the Sensex and the Nifty - hence a sharp movement in this shares, tends to impact the indices accordingly.

On Tuesday, Axis Bank and HDFC Bank rallied nearly 3 per cent each to Rs 1,267 and Rs 1,717, respectively. ICIIC Bank rallied over 2 per cent. SBI and Kotak Bank were up around a per cent each.

FIIs up long bets in F&O:Following finalization of the government at the Centre, foreign institutional investors have covered their short positions, and steadily build long positions in the index futures. As of June 24, FIIs net long in index futures rose to 1.44 it’s highest in more than two months. FIIs held 59.08 per cent net longs in index futures. 

FIIs have been net buyers in index futures in the last seven straight trading sessions. FIIs have added around 1.83 lakh across index futures, which include Nifty, Bank Nifty and others.

Outlook:Technically, the NSE Nifty seems on course to test the super trend line resistance on the daily chart at 23,850-odd levels; above which the index can extend the rally beyond 24,000-mark.

The BSE Sensex is closing in on a crucial Fibonacci resistance at 78,150 levels. The index will need to cross this, in order to open the doors for further upside in the year ahead.