New Delhi : Markets took a turn on Wednesday with Nifty bank falling 4 per cent as HDFC bank share price slipped 7 per cent on concerns around slowdown in deposit growth, Jaykrishna Gandhi, Head – Business Development, Institutional Equities, Emkay Global Financial Services, said.
As talks around rate cuts continue and as banks struggle with balancing credit growth vs margins, we are likely seeing a tactical rotation towards good quality NBFCs, he said.
As street is baking in good earnings growth for most mid cap names, Incrementally flows will be driven on how close actual releases come vs expectations built, he said.
Last week, Nifty had a runaway rally as we kick start earnings season with large cap IT names beating estimates on margins helped by cost optimisation.
Management commentary around discretionary spending remained weak, he added.
Vinod Nair, Head of Research, Geojit Financial Services said a nosedive correction in banking stocks, along with concerns over delays in US Fed rate cuts, impacted market sentiments.
The addition of discouraging Chinese growth data and rising US bond yields, also resulted in widespread profit-booking.
Given the elevated valuations, coupled with the fact that optimism regarding earnings and GDP growth for FY24 is already reflected in the market, triggered the correction, he said.
Rupak De, Senior Technical Analyst, LKP Securities said Nifty witnessed a significant decline driven by profit-taking following its record high of 22,124 in the previous trading session.
Wednesday’s profit booking led the index to the 21-day Exponential Moving Average, a crucial short-term moving average.
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