Finance stocks on a roll! Axis Bank zooms 7% today

Finance stocks, including that of Axis Bank, Bajaj Finserv, State Bank of India (SBI), Bajaj Finance, IndusInd Bank and HDFC Bank were trading sharply higher on Bombay Stock Exchange (BSE) in Thursday’s intra-day trade.
 
Axis Bank jumped 7 per cent to hit an intraday high of Rs 720.3 on BSE. With a market capitalisation of more than Rs 2,15,000 crore, the shares stand higher than 5 day moving averages but lower than 20 day, 50 day, 100 day and 200 day moving averages.

 
Emkay Global has a buy call on Axis Bank with a target price of Rs 1020 per share.
 
Likewise, the shares of IndusInd Bank zoomed over 6 per cent to hit an intraday high of Rs 927.75. The stock has been gaining for the last 3 trading sessions.
 
Bajaj Finserv, ICICI Bank, Bajaj Finance, Kotak Mahindra Bank and HDFC Bank were trading 3-4 per cent higher in the afternoon session on Thursday.
 
Emkay Global expects Q4 results to be healthy for financiers given improving growth/asset quality trends. It said that the recent correction offers a good entry point into quality stocks like ICICI, Axis, SBI and Federal Bank.
 
Brokerage firm Dolat Capital Credit noted that the growth improved in the recent months, after remaining benign for a long period, driven by sharp uptick in personal and agri loans.
 
It added that the industry credit growth also witnessed improvement driven by chemicals and textiles while services growth was on account of Trade and NBFCs. Deposits growth witnessed moderation. Net excess liquidity parked with the RBI under the Reverse-Repo at Rs 6,80,000 crore continues to remain benign despite some uptick in credit growth.
 
"While benign liquidity helped banking spreads and low interest rates aided high treasury gains in recent quarters, NPLs benefitted from sharp decline in corporate stress and the ongoing forbearance (ECLGS/RSA), resulting in a 200 bps decline in GNPA ratio since the COVID outbreak,” said Dolat Capital.
 
Decline in corporate stress has been aiding the sector’s profitability despite impact of COVID, it added.