Five stocks in the banking sector investors should watch out for!

Check out these banking companies that are buzzing on the bourses.

After a year of underperformance by the banking sector vis-a-vis the benchmark, the sector is off late has rebounded with renewed vigour and positive market sentiment. The sectoral index S&P Bankex has gained 5.8% in one week compared to the benchmark index BSE Sensex which gained 3.9% during the same period.

Let us decode which banking stocks are gaining positive momentum and why?

Bandhan Bank:  The private bank was the biggest gainer among the banking stocks in the last one week gaining 12.1% on the back of relaxation of microfinance lending norms by the RBI. The RBI has mandated that all regulated entities (REs) should put in place a board-approved policy regarding pricing of microfinance loans, covering, a ceiling on the interest rate and all other charges applicable to microfinance loans. The revised norms have caused positive momentum in the shares of Bandhan Bank which gained 4.7 % in yesterday’s session. In the morning trades on Thursday, Bandhan Bank was trading at Rs 297.60, up 1.07% or 3.15 per share.

HDFC Bank: The stock has jumped 2.3% in the morning session extending its rally after the lifting of curb on the largest private bank by RBI. In August 2021, RBI had partially lifted the ban on HDFC Bank by allowing it to issue new credit cards but had continued the embargo on its digital activities planned under its Digital 2.0 programme. This has led to renewed interest among market participants in the shares of HDFC Bank which has surged 6.6% in one week. In the morning trades on Thursday, HDFC Bank was trading at Rs 1483.25, up 2.42% or 35.10 per share.

State Bank of India: The Banks Board Bureau (BBB) on Wednesday recommended the name of Alok Kumar Choudhary for the post of managing director of SBI. The final decision on the appointment will be taken by the Appointments Committee of the Cabinet headed by the Prime Minister. Choudhary, who is deputy managing director (Finance), will replace Ashwini Bhatia who has been appointed a whole-time member of SEBI. In one week SBI has surged 6.7% becoming the second-biggest gainer after Bandhan Bank. At the time of writing, shares of SBI were trading Rs 500.60, up 1.63% or 8.05

IDBI Bank: The company in its exchange filing on March 11 has announced that it became one of the stakeholders of National Asset Reconstruction Company Limited (NARCL) on March 10, 2022, by executing an investment agreement of total cash consideration of up to Rs 137.50 crore and Rs 135 crore in tranches to acquire up to 5% of equity capital and NCDs, respectively, of NARCL (proposed to be issued). NARCL will primarily undertake acquired belongs activities of Asset Reconstruction Company while IDRCL will act as a debt resolution company. At the time of writing, IDBI Ltd was trading at Rs 43.45, up 0.12%.

Bank of Baroda: On Monday, Bank of Baroda and BNP Paribas Asset Management announced a strategic alliance in which they will combine the strengths of their respective asset management companies to develop the 'Baroda BNP Paribas Mutual Fund.' According to a release, the Bank of Baroda would own 50.1% of the asset management firm (AMC), while BNP Paribas Asset Management will own the remaining 49.9%. During the week the stock rallied 3.16%. At the time of writing, shares Bank of Baroda were trading Rs 108.75, up by 0.97% or 1.05.