Bank Nifty recovers 770 points from day’s low, turns flat as HDFC Bank, Yes Bank gain; PSU banks lag

Reports coming in for today mention that Bank Nifty staged a sharp recovery from its intraday low on Friday, erasing a decline of as much as 1.4 percent to trade flat in the afternoon, along with a broader market rebound as oil price marks retreated from early highs. The banking index was nearly unchanged at 56,471 around 2 pm, having recovered roughly 770 points from the day’s low.

The The two key benchmark indices 50 additionally pared a large part of their earlier losses, recovering more than 500 points and 150 points, respectively, from their intraday lows. At 1:57 pm, the Sensex was still down 220 points, or 0.3 percent, at 74,682, while the Nifty was 94 points, or 0.4 percent, softer at 23,384.

Among banking stocks, HDFC Bank rose nearly 1 percent to Rs 700.45 after touching an intraday high of Rs 701.70. Yes Bank jumped 6.2 percent to Rs 23.69, while PNB advanced 0.4 percent to Rs 117.35. Kotak Mahindra Bank was up 0.35 percent at Rs 418 and Axis Bank traded marginally elevated at Rs 1,247.

The upside helped offset softness in several other lenders. IndusInd Bank declined 1.9 percent to Rs 974.50, while SBI declined 1.4 percent to Rs 995.50. Canara Bank and Federal Bank were down 0.9 percent and 0.8 percent, respectively, while IDFC First Bank, Union Bank of India and Bank of Baroda additionally traded softer.

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Private banks outperformed their public-sector peers, with the Nifty Private Bank index up 0.25 percent while the Nifty PSU Bank index was down 0.68 percent.

That stated, the broader market remained weak despite the recovery in the key market indices. The Nifty Midcap 100 was down 0.44 percent and the Nifty Smallcap 100 declined 0.67 percent. Market breadth was firmly negative, with 1,405 shares advancing against 2,494 declining. INDIA VIX rose 5.7 percent to 12.47.

The partial recovery in equities coincided with oil reversing its early upside. Brent crude futures declined to below $106 a barrel, easing from nearly $110, while US West Texas Intermediate crude eased to around $101 per barrel. Crude prices turned softer after the Financial Times noted that foreign ministers in the Middle East were working towards a temporary agreement with Iran to manage shipping through the Strait of Hormuz. Brent had earlier touched a four-month high of $109.97 a barrel.

Despite Friday’s retreat, crude remained elevated after both benchmarks surged more than 6 percent on Thursday and were still up more than 10 percent for the week. Oil was additionally on course to finish the week above $100 a barrel for the first time since mid-May.

Elevated crude prices have revived global inflation concerns and expectations of tighter monetary policy. US producer-price data released on Thursday further noted to those worries, while a global bond selloff pushed the US 10-year Treasury yield towards 5 percent. Traders were pricing in a 72 percent probability of a The US central bank interest-rate gain the week ahead, up from 49 percent a week earlier, according to the CME FedWatch tool cited by Reuters.