The Nifty Bank Index is a benchmark that tracks the performance of India’s most liquid and largest banking stocks. It serves as a key indicator for investors and market participants assessing the capital market performance of Indian banks. The index consists of a maximum of 12 listed companies on the National Stock Exchange of India (NSE), making it a crucial barometer for the banking sector’s health.
On February 3, 2025, the Nifty Bank Index opened with a gap-down amid global uncertainty. During intraday trade, it plunged below the psychological level of 49,000 before rebounding and stabilising above 49,250 as of 2:52 PM. However, despite this partial recovery, the index remained in the red throughout the session.
The advance-decline ratio indicated weak market sentiment, with 2 declining stocks for every 1 advancing stock. Among the notable contributors to the index’s fall were:
Conversely, AU Small Finance Bank and IndusInd Bank emerged as the top gainers, helping cushion some of the losses.
The Indian rupee hit its lowest level following concerns over fresh tariff impositions by the United States. Market participants reacted sharply as the White House confirmed tariffs on Mexico, Canada, and China, effective February 1, 2025.
Additionally, US President Donald Trump threatened a 100% tariff on BRICS nations in response to de-dollarisation efforts by these countries. This escalation triggered a sell-off across global markets, leading to heightened risk aversion in all asset classes, including gold and cryptocurrencies.
In response to the US tariff decision, several countries announced countermeasures:
These developments contributed to the uncertainty gripping financial markets, weighing on banking stocks that are sensitive to global liquidity conditions.
As of February 3, 2025, the Nifty Bank Index has declined by 3.12% in CY 2025.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing
Published on: Feb 3, 2025, 3:51 PM IST
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