Nifty Bank plummets 5,000 points: Major banks PNB, SBI, HDFC see sharp declines

The Nifty Bank index saw a sharp decline, plunging 5,000 points in a single trading session, which significantly impacted major banking stocks like Punjab National Bank (PNB), State Bank of India (SBI), and HDFC Bank, each experiencing falls of up to 20%. This unexpected downturn was triggered by investor reactions to poll trends indicating a stronger than anticipated performance by the INDIA alliance against the BJP-led NDA alliance.

During the day, Nifty Bank reached a low of 46,077.85, with all 12 index stocks in the red. Major contributors to the decline included heavyweights HDFC Bank and ICICI Bank, alongside Reliance Industries. By the close, the index settled at 46,928.60, marking an 8% drop. Notably, SBI saw a substantial 19% drop to an intraday low of Rs 732, significantly reducing its market capitalisation.

HDFC Bank's stock also declined by 7.5%, hitting a low of Rs 1,454 before closing down by 5.24% at Rs 1,489.75. Similarly, ICICI Bank tumbled 9.2% to a day's low of Rs 1,053.55. Other banks, including PNB and Bank of Baroda, saw declines of around 20%, with Bandhan Bank, IndusInd Bank, Federal Bank, and others also experiencing significant losses between 4% and 12%.

Experts like Bhavik Patel from Tradebulls Securities noted that the market's reaction was driven by election-related news, causing a "bloodbath" in the Bank Nifty. Meanwhile, Rupak De from LKP Securities pointed out that the banking index might find support near its 200-day EMA at 46,200, though he warned of further selling pressure if this level is breached.

The 5,000-point crash in the Nifty Bank index marks one of the most significant drops in recent history, underscoring the fragility of the current economic environment. While the declines in PNB, SBI, and HDFC Bank highlight specific vulnerabilities within the banking sector, the broader implications suggest a need for comprehensive strategies to address both global and domestic financial challenges. Investors and market participants will be keenly watching for signs of stabilisation and recovery in the coming days and weeks.