The Indian stock market is trading at the high point of the day with Sensex surging 797.27 points or 2.6 percent at 31406.57, and the Nifty jumped 228.50 points or 2.53 percent at 9257.55.
Among the sectors, Bank Nifty zoomed over 6 percent led by Axis Bank which was the top index gainer, spiking over 11 percent followed by ICICI Bank, Bandhan Bank, Federal Bank, HDFC Bank, IndusInd Bank, Kotak Mahindra Bank and RBL Bank.
Also, the most active securities included mostly banking names on NSE with 6,34,61,585 shares being traded in ICICI Bank, followed by State Bank of India (6,62,25,699), Axis Bank (5,35,84,747), HDFC Bank (2,05,07,080) and Kotak Mahindra Bank (1,00,77,222) shares at 14:25 hours.
Share price of Axis Bank surged on May 27 after report indicated that Global private equity (PE) firm Carlyle Group may make an investment of around $1 billion in Axis Bank and has begun discussions on the capital infusion, according to Economic Times.
"The conversation has been ongoing for almost a month. The Axis stock has been volatile. The brass seems to be warming up to the idea of another deep-pocket marquee investor in recent weeks," the newspaper quoted a source as saying.
Shabbir Kayyumi, Head of Technical Research at Narnolia Financial Advisors has a buy on ICICI Bank and Kotak Mahindra Bank with targets of Rs 340 and Rs 1,300 per share respectively.
The momentum oscillator RSI in ICICI Bank is in positive territory and entering into a trending phase. The MACD too indicates good momentum-trend follow-through while in Kotak Bank, formation of the double bottom on the daily chart indicates the consistency of positive rhythm in the stock, he said.
On the other hand, Sundar Sanmukhani, Head of Fundamental research desk at Choice Broking is of the view that the banking sector is likely to remain under pressure in the near term due to high correlation with the economy, and the assets quality and business growth are expected to remain subdued in coming quarters.
He feels that investors with a medium to long term horizon can invest in ICICI Bank, HDFC Bank, and Axis Bank. These are top private sector banks with strong fundamentals and also available at a multi-year low valuation.Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.