D-Street Buzz: Banks edge higher led by IndusInd Bank, ICICI Bank SBI; Bandhan Bank, PNB up 3-4%

The Indian stock market is trading flat as the Sensex is down 4.92 points or 0.01 percent at 39609.15, and the Nifty shed 10.70 points or 0.09 percent at 11631.70.

Among the sectors, the banking space outperformed with Bank Nifty adding over 2 percent led by IndusInd Bank, ICICI Bank and State Bank of India.

IndusInd Bank share price jumped 6 percent intraday on November 2 and is the top index gainer after the bank declared its September quarter results. The private lender on October 30 said its Q2FY21 consolidated net profit stood at Rs 663.1 crore, up from Rs 510.39 crore QoQ and down from Rs 1,400.96 crore YoY.

The profit numbers beat market expectations as a CNBC-TV18 poll which had estimated the numbers to the tune of Rs 549.6 crore. Total income for the quarter stood at Rs 8,731.52 crore against Rs 8,682.17 crore QoQ and Rs 8,877.53 crore YoY.

ICICI Bank share price gained over 5 percent after the bank reported better numbers for the quarter ended September 2020. On October 31, company reported a profit of Rs 4,251.3 crore in the September quarter, a six-fold jump from a profit of Rs 655 crore in the same quarter of the last fiscal, CNBC-TV18 reported.

Net interest income (NII), the difference between the interest income from lending and the interest paid to depositors, during the quarter was up 16.2 percent at Rs 9,366.1 crore from Rs 8,057.4 crore, YoY.

The Reserve Bank of India (RBI) filed an affidavit in the Supreme Court (SC) stating that banks and non-banking finance companies (NBFC) have to repay the 'interest on interest' amount collected on loans up to Rs 2 crore during the loan moratorium period by November 5.

The moratorium period under consideration is from March 1 to August 31, and it is on servicing of loans during this period that interest will be repaid by lenders, reported LiveMint. This order will be applicable to all financial institutions and shall be accredited to all eligible borrowers.

The other gainers in the banking space included Bank of Baroda, Bandhan Bank, RBL Bank and Kotak Mahindra Bank.

Equitas Small Finance Bank shares failed to cheer investors on November 2 as it debuted at a 6 percent discount to its issue price. The stock opened lower by 6.06 percent at Rs 31 on the BSE, while it was down 5.76 percent at Rs 31.10 at open on the National Stock Exchange, against issue price of Rs 33 per share.

It was largely on expected lines given the tepid response to its public issue which was subscribed 1.95 times during October 20-22 and weak market conditions, experts feel.

ICICI Bank was one of the most active stocks on NSE in terms of volumes with 3,93,68,425 shares being traded followed by Punjab National Bank (3,28,21,445), Bank of Baroda (2,96,92,130), State Bank of India (2,77,43,114), Yes Bank (2,74,04,841) and IndusInd Bank where 1,91,73,106 shares were being traded.

Shabbir Kayyumi, Head of Technical & Derivative Research at Narnolia Financial Advisors suggests buying ICICI Bank with target price at Rs 420. Momentum indicators have started trading in a bullish zone. On the weekly timeframe, it formed a bullish belt hold candlestick pattern that suggests strong support at bottom levels. Positive crossover of medium-term moving averages is also giving cues to take a long position in the stock, he said.