Nifty Bank extends losses to 3rd straight day, declines up to 1.6% on Axis Bank's Q4 results; Kotak, SBI fall up to 2%

Banking stocks remained under pressure for the third consecutive day on Friday.

Banking stocks remained under pressure for the third consecutive day on Friday, with the Nifty Bank index declining as much as 1.8 percent, weighed down by Axis Bank’s subdued March quarter earnings.

The index, which had touched a record high of 56,098.70 on April 23 during intraday trade, continued to reel under selling pressure and settled lower around the 55,200 mark by Thursday.

In the last three sessions, the Nifty Bank has lost 2.6 percent, largely attributed to profit booking following a sharp rally over the past weeks.

"After the strong upmove in the past two weeks, the index has entered a consolidation phase, with support seen near the 54,500 level — which aligns with the previous major peak. Sustaining above this zone will be crucial for any fresh upside towards 56,200 and 57,500 in the coming sessions," said Vaishali Parekh, Vice President - Technical Research at Prabhudas Lilladher.

Of the 12 constituents of the index, 11 were trading in the red. IndusInd Bank was the sole gainer, up marginally at Rs 821.80 on the NSE.

Axis Bank led the losers, plunging 5.06 percent to an intraday low of Rs 1,146. The country’s third-largest private lender on Thursday reported a marginal fall in net profit for the March quarter at Rs 7,117 crore, compared to Rs 7,130 crore in the same period last year.

The drop in profit was driven by a steep 64 percent jump in provisions for potential loan losses and lower trading income.

Among other key laggards, Punjab National Bank and Federal Bank dropped between 2 and 3 percent, while heavyweights HDFC Bank and ICICI Bank declined around 1 percent each. State Bank of India, the country’s largest public sector lender, was down nearly 2 percent.

The recent rally in banking stocks, seen last week, was sparked after the Reserve Bank of India released updated norms for Liquidity Coverage Ratio (LCR) on April 21. The central bank had introduced an additional run-off rate of 2.5 percent on internet and mobile banking-enabled retail and small business deposits, prompting market optimism at the time.

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