The Nifty Bank index experienced a notable decline around 11 am on March 12, after initially opening flat. The banking index exhibited significant volatility throughout the morning session, initially surging by nearly 500 points before eventually surrendering the gains to trade 0.3% lower at 47,210 points.
During this intraday movement, most banking stocks faced downward pressure, with only HDFC Bank managing to maintain its stability. Notably, prominent lenders such as Axis Bank, Bajaj Finance, and ICICI Bank observed a sudden decline in their share prices, contributing to the overall downturn in the banking sector.
Analysts attribute this volatile movement in banking stocks to several factors. Firstly, investors are closely monitoring the much-awaited release of inflation data scheduled after market hours on March 12. The outcome of this data release is expected to have a significant impact on market sentiment and may influence the future actions of central banks regarding monetary policy.
Additionally, market participants are also gearing up for the weekly expiry of banking stocks scheduled on March 13. This event often leads to increased volatility and trading activity in banking shares as traders adjust their positions ahead of the expiry date.
Commenting on the market dynamics, Shreyansh V Shah, a Research Analyst at StoxBox, remarked that the combination of these factors likely contributed to the downward pressure observed in banking stocks during the morning session. As investors navigate through these uncertain market conditions, heightened volatility and cautious trading behavior are expected to persist in the banking sector in the near term.