Banking Sector Looking More Attractive Amid Rising Deposits: Analyst

The banking sector is looking more attractive as deposits for many banks have risen due to the high fixed-deposit rates, according to Vijay Chopra, chief executive officer of Enoch Ventures.

The overhang of bad loans and bad asset quality has passed in the last three to four years, Chopra told NDTV Profit on Friday. The right time to grab a good-quality stock is when there is a "large amount of pessimism around it,"  he said.

Chopra underscored that large-cap banks have a good scope to perform well. He recommends IndusInd Bank Ltd. and the State Bank of India.

Under the public sector banks, he recommended Bank of Baroda, Bank of India, Indian Bank, UCO Bank, and IDBI Bank Ltd. In the private sector, he recommended HDFC Bank Ltd. and Kotak Mahindra Bank Ltd.

In the past two trading sessions, the Nifty Bank performed relatively well as compared to the NSE Nifty 50, which experienced some volatility, according to Ruchit Jain, lead research analyst at 5Paisa Capital Ltd.

He pointed out that private sector banks are among the top performers, citing HDFC Bank, Kotak Mahindra Bank and ICICI Bank Ltd.

"The downside for the banking sector looks very limited for the short term," he said. "The heights of the high-bottom structure will assist Bank Nifty to reach an all-time high."

The benchmark stock indices erased earlier losses to close little changed on Friday, led by gains in rate-sensitive realty and banking stocks. This helped the indices clock their third weekly gain.

"Following the RBI policy announcement, the Bank Nifty maintained its robust momentum, remaining above the crucial level of 48,000," Kunal Shah, senior technical and derivative analyst at LKP Securities Ltd., said. "This suggests the potential for reaching new all-time highs next week, possibly even touching the 50,000 mark."

"Notably, aggressive put writing has been observed at lower strikes, establishing a supportive base in the 48,200–48,000 zone, which is anticipated to serve as a cushion for bullish sentiment," he said.

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