More left to rally in bank stocks. Anand James explains why

Rupak De, Senior Technical Analyst at LKP Securities, recommends PNB, Chambal Fertilisers, and Havells as top stock picks for the week ahead. Nifty levels to watch out for are 22,500 and 22,400 with support expected to hold at 22,400. Bank Nifty is expected to outperform the Nifty with potential upward moves towards 49000.

Going ahead, stock specific action will continue with first quarter earnings underway. All eyes will be on HDFC Bank, which will report its results today, a first after the merger. Banking stocks will be in focus as major private lenders including ICICI Bank, YES Bank, Kotak Bank will announce their earnings later in the week.

IIFL Securities' Sanjiv Bhasin recommends owning both IndusInd and HDFC Bank because of their strong return on equity, return on capital, and branch expansions. He also believes that Zomato is a no-brainer for the restaurant business and Paytm can be a huge outperformer with its financial arm in the offing. Bhasin agrees that the electronics manufacturing industry is in a sweet spot and companies like Havells and Voltas are doing extremely well. Additionally, he prefers IndusInd Bank, which he has personally invested in.

Domestic indices NSE Nifty 50 and BSE Sensex were trading flat on Friday. State Bank of India, HDFC Bank, Infosys, ICICI Bank and ITC were the most active stocks on NSE.

Investors are advised to adopt a cautious approach due to uncertainties in the financial markets. Nifty and Bank Nifty experienced a correction, along with global markets, as concerns over the Israel-Hamas crisis and US Fed Chairman Powell's speech weighed on the markets. Next week, investors will watch out for the US Fed Chairman's speech, ECB rate decision, US GDP estimates, and the quarterly earnings of major companies. Midcap and small-cap stocks have performed well, but investors should be selective and consider booking profits. Volatility may increase in the future.

Positive news flow on Jio as well as Reliance consumer products apparently boosted the sentiments for the stocks, which had been dominated by bears post the first half of May.

Godrej Properties, Prestige Estates, and Brigade Enterprises led the 3.9% surge in the BSE Realty index last week. While momentum indicators such as RSI indicate an overbought situation for the stocks in the realty sector and some consolidation is needed, the overall outlook of the market remains bullish. Banking stocks such as ICICI Bank, HDFC Bank, and SBI pulled down Nifty Bank; while technical charts suggest momentum is missing in Bank Nifty, Nifty appears more positive. The BSE IT index faced a stock-specific drag with 48% of the index being dragged down by TCS and Wipro.

Anand James says despite the RBI ban, the Paytm stock presents a trading opportunity. Caution needed in the last week of the series. Private banks outperforming PSU counterparts. Cherry-picking opportunities emerging in PSU bank stocks. Yes Bank shares facing bearish technical structure. Trading play in Paytm stock with an upside objective of 500-550.

The S&P BSE Sensex fell 671.15 points to 59,135.13, while the NSE Nifty 50 tanked 1 per cent to 17,412.90. It marks the biggest one-day decline for the benchmarks in over two weeks.

A decisive decline below this level could potentially drive the index towards 43,800/43,500. On the upside, 45,000 is likely to provide strong resistance,” he said.