Stock market experts remain optimistic that the recent upswing in banking stocks will continue, as bank margins are expected to improve in the short to medium term.
The interest rate charged on loans taken out by multinational corporations in other countries is significantly higher than the cost of borrowing money from Indian lending institutions. To put it another way, this gives Indian banks a huge leg up on the competition.
The Bank Nifty index hit a new record high of 43,339 for the second trading session in a row last week. This shows that investors are still interested in buying Indian stocks in the banking sector.
Vinod Nair, Head of Research at Geojit Financial Services, said that domestic indices kept slowly going up as investors waited for the minutes from the Fed meeting. He went on to say that the market was being held back by the unpredictability of foreign investors.
There has been a net outflow of 30.43 billion Indian rupees ($371.99 million) in equities from foreign institutional investors over the past trading sessions.
Despite the fact that the global macroeconomic situation is still uncertain and challenging, the benchmark index Nifty50 has jumped from a one-year low in June to a new record high in just five months.
This week, the Nifty50 index reached an all-time high of 18,614.25 points, surpassing its previous best. The index had dropped 15,183.40 points on June 17th, its lowest point in the previous 12 months. Goldman Sachs forecast last week that the Nifty 50 index would reach 20,500 points by the end of 2023. The investment firm also said that the economy’s basic building blocks would remain strong during this time.
The benchmark S&P BSE Sensex went up 0.15% last week to 61,510.58, while the NSE Nifty 50 index (.NSEI) climbed 0.13% to 18,267.25.
The indexes achieved gains of up to 0.5% during the course of the session. Despite this, the trading range for the Nifty was the lowest it had been in the previous month, at 79.40 points.