Top Indian Banks & Nifty Bank Fall Under Bear Grip; Axis Bank Tanks 11% in A Week

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Top Indian Banks & Nifty Bank Fall Under Bear Grip; Axis Bank Tanks 11% in A Week
Credit: © Reuters.

By Malvika Gurung

Investing.com -- Sectoral index Nifty Bank has entered into the bear market, tanking 20.7% compared to its most recent peak of 41,829.6, on rising concerns of escalating crude oil prices cutting the country’s GDP growth. 

The country’s most valued banking stock in terms of market capitalization HDFC Bank (NS: HDBK ) has plunged 21.9% from its peak hit on Oct 18, and ICICI Bank (NS: ICBK ) has tanked over 23% from its high on Oct 25, both trading in the bear grip at the time of writing.

However, analysts see a potential upside of up to 55% on HDFC Bank’s counter, along with delivering healthy return ratios, even though the stock is currently witnessing weakness led by accentuating FII selling.

KRChoksey believes that this is the right time to add select financial stocks like ICICI Bank and HDFC (NS: HDFC ) to the portfolio, as they are at corrected levels.

Moreover, Axis Bank (NS: AXBK ) has underperformed Nifty Bank , falling 10.6% and 16.6% on a weekly as well as monthly basis, respectively.

Amid the ongoing Russia-Ukraine crisis and multiple sanctions imposed by the Western nations on Russia, oil prices have rallied to multi-year highs, adding to concerns of supply pressures and rising inflation, with the US Federal Reserves looking to tighten monetary policy in 2022 to curb inflation.

Due to the aggravating war, global economic health is degrading, with economies of emerging markets like India impacting more.

As a result, the volume of foreign investors selling off their funds and reducing their holdings in domestic stocks have risen substantially so far this year, mirroring sharp cuts in the prices of some major banking stocks.

FPIs have pulled out about Rs 1 lakh crore worth funds from domestic stocks, by far in 2022.

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