The Nifty Bank Index continued to outperform on Friday, and surged over 450 points intraday to hit a record high of 29,379, up over 1.5 percent. The NSE index has hit a new high for the fourth consecutive day. Shares of both public and private banks advanced during the day.

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Given the current tight liquidity condition, analysts are positive on private banks with strong financials. "Banks with higher-rated corporate loan books coupled with a strong current account savings account (CASA) and retail term-deposit franchises should be preferred," said an analyst at Centrum Broking.

Kotak Bank was leading the Nifty Bank pack, up 3.5 percent followed by Punjab National Bank (PNB), Bank of Baroda, State Bank of India (SBI), RBL Bank and Federal Bank, up in the range of 1.5 percent to 2.8 percent. Yes Bank was the only stock trading in red in the index.

HDFC Bank, which was currently trading higher by 0.7 percent, hit a record high of Rs 2,247, up 1.3 percent in intraday today. In past four sessions, the stock has gained 5.5 percent after it announced its board will meet on April 20, 2019, to consider the audited financial results for the quarter and year ending 31st March 2019 along with the consolidated accounts for the year ending 31st March 2019 and recommendation of dividend, if any.

"HDFC Bank boasts of a strong lending franchise and capital position, healthy growth in fund and non-fund based income, impeccable asset quality performance, and high return ratios. Improving operating efficiency with further improvement in cost to income ratio is expected to be a key driver for return on assets (RoA) expansion," Reliance Securities said.

ICICI Bank, too, hit an all-time high of 395.45, up 2 percent during the day. In the past four trading days, the stock has rallied 11 percent, as compared to 2.6 percent rise in the S&P BSE Sensex.

This stock remains the top pick for analysts at Reliance Securities in the banking sector. They believe that the bank’s liability and asset franchise has strengthened over the years with de-risking of its loan portfolio, rising market share in CASA, increased competitiveness in the cost of funds relative to peers, and improving capital efficiencies.

The Nifty Bank surged 9.6 percent in March, outperforming the Nifty 50, which has gained 5.8 percent. For the month of March, all Nifty Bank constituents were in green. Punjab National Bank rose the most and was up 19 percent from the index, followed by Bank of Baroda, IndusInd Bank, ICICI Bank, RBL Bank, Yes Bank, HDFC Bank, Axis Bank, Kotak Bank, and SBI, all up in the range of 4.8-17 percent.

First Published:Mar 15, 2019 1:04 PM IST