The Bank Nifty index is set to open the week on a strong note after a decisive breakout on Friday, June 6, when it surged 1.47% to close at a record high of 56,578.40. The rally was fueled by the Reserve Bank of India’s surprise 50 basis point repo rate cut and a 100 basis point reduction in the cash reserve ratio, moves that have enhanced liquidity and improved the credit outlook for banks.
Friday’s session saw IDFC First Bank leading the pack with a 7.11% jump, reaching a seven-month high on expectations of stronger net interest margins and accelerated loan growth. Other major gainers included AU Small Finance Bank, Axis Bank, and IndusInd Bank, while heavyweight lenders like Kotak Mahindra Bank, HDFC Bank, and State Bank of India also contributed to the rally. However, Canara Bank and Bank of Baroda posted modest declines.
Technically, Bank Nifty broke out of a prolonged consolidation phase in the 55,000–56,000 range, closing well above the 56,000 mark. This breakout was accompanied by a spike in the Relative Strength Index (RSI) to levels not seen since mid-April, signaling renewed bullish momentum. Analysts note that the index has formed a bullish candle on the daily chart, suggesting the potential for a continued run toward the 57,200 mark in the coming sessions.
Key resistance levels for Monday are pegged at 57,078 and 57,388, while immediate support is seen at 56,078 and 55,769. While the medium-term outlook has turned positive, experts caution that a near-term pullback cannot be ruled out after the recent sharp gains. Market participants will closely monitor global cues and sectoral trends for further direction.
Overall, sentiment in the banking sector remains upbeat as policy support and technical strength align, setting the stage for another potentially volatile but positive trading day.
