Bank Nifty records biggest single-day gain since May 2014

Banking shares have seen a smart recovery on the bourses with the Bank Nifty, the bank index, recorded its biggest single-day gain since May 16, 2014.

Bank Nifty, gained 3.55% or 561 points at 16,351, has registered its sharpest single-day rally in past 16 months after falling more than 15% in past one-month on the National Stock Exchange (NSE). The benchmark CNX Nifty was closed 1.7% higher at 7,688 today.

On May 16, 2014, Bank Nifty rallied 4.3% or 616 points when the Narendra Modi-led BJP won an overwhelming mandate in elections.

Yes Bank and Axis Bank have surged more than 5% each on the NSE.  ICICI Bank, State Bank of India, Bank of India, Bank of Baroda, Punjab National Bank, Union Bank of India, Kotak Mahindra Bank, Oriental Bank of Commerce, IDBI Bank and Canara Bank were up 3%-5% on the NSE.

In past one-month, the Bank Nifty had underperformed the market by falling 17% against 12% declined in the CNX Nifty till yesterday.

Prime Minister Narendra Modi today asked India Inc to increase risk-taking appetite and step up investments even as industry leaders pressed for interest rate cut and more policy action to improve ease of doing business. CLICK HERE TO READ FULL REPORT.

Among individual stocks, Yes Bank closed 7% higher at Rs 697 on the NSE today. The stock of private sector lender was down by 24% from the record high of Rs 909, on concerns about asset quality.

Analyst at Bank of America Merrill Lynch reiterates ‘Buy’ rating on the stock with a price objective of Rs 1,150.

“In the noise about the bank’s asset quality, we believe that the ‘build-up’ of its branch banking franchise is clearly being ignored. A large part of this is already visible on liability side. The focused approach toward customer acquisition and building a branch-centric model should ultimately lead to the desired/expected full ‘retail’ model,” analyst said in a report dated September 7, 2015.

Analyst at Deutsche Bank also recommends ‘buy’ rating on the stock with a target price of Rs 1,000.

“The valuation of Yes Bank has corrected sharply over the past few days on global deflation concerns/ currency / NPL (non-performing loan) concerns. We believe that Yes Bank’s current underperformance provides a good opportunity, as both earnings risk and liquidity risk have consistently reduced for Yes Bank,” said analyst in a report dated September 8, 2015.

Bank	07/09/2015	08/09/2015	% Change
Yes Bank	650.70	696.85	7.09
Axis Bank	449.85	473.90	5.35
Bank of India	127.25	133.50	4.91
ICICI Bank	249.10	260.80	4.70
Bank of Baroda	169.80	177.70	4.65
St Bk of Mysore	402.45	419.75	4.30
South Ind.Bank	20.05	20.90	4.24
Union Bank (I)	153.45	159.45	3.91
PNB	127.90	132.85	3.87
Oriental Bank	122.15	126.85	3.85
Kotak Mahindra Bank	600.65	620.40	3.29
SBI	221.10	228.35	3.28
Karnataka Bank	109.55	113.10	3.24
Canara Bank	252.60	260.70	3.21
DCB Bank	122.60	126.30	3.02
Bank Nifty	15790.10	16350.95	3.55
Nifty	7558.80	7688.25	1.71
Price on NSE in Rs