Stock Market: Indices swing sideways; banking star of 2022 extends bull run

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By S Jha

New Delhi, January 3: Stock Market indices were sideways on Tuesday, as big participants stayed cautious on the bourses, while the foreign institutional investors shorted again. The Bank Nifty marginally pulled the indices in the green, as investors continued with their theme run of 2022 in 2023.

Last year, the banking stocks were the favourite of the investors, as they outperformed the other sectors. Even the FIIs had strongly been chasing the banking stocks. The PSU banking stocks outperformed their private peers, bouncing on account of the low base effect and also on account of the cleaning of the books. The banks are in healthier state, thanks to turnaround in the quality of their books, while benefiting from the key reforms taken by the Narendra Modi-led NDA government at the Centre.

Within the private banking space, the extent of the digital banking and scope of the credit card business are seemingly enticing the investors. The ICICI Bank had been the favourite of the investors immediately after the pandemic in 2021 as it gained quickly by employing digital technology. However, the ICICI bank could not carry the momentum in 2022 and it passed the baton to Axis Bank and IndusInd Bank.

Axis Bank was the banking star on the bourses in 2022. It is not yet tiring, as Axis Bank on Tuesday scaled the 960 mark, and the scrip is staring at an all-time high valuation. The market participants are crediting Axis Bank’s turnaround for its heavy investment in technology space, while it’s gaining grounds in the credit card business. The acquisition of the Citi Bank credit card business in India, which was strong in the high networth individual clientele, is also likely to give a strong momentum to Axis Bank in the near future.

Incidentally, the likes of HDFC Bank, the banking behemoth despite the announcement of the mergers with siblings, remains a laggard on the bourses along wth Kotak Mahindra Bank. Clearly, the PSU Banks, Axis Bank and IndusInd Bank have emerged as the investors’ favourites as per the performance of their share prices.

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