Shares of IDBI Bank fell sharply on Tuesday, extending their fall for the second straight session amid heavy volumes. The stock declined 5.36 per cent to hit an intraday low of Rs 55.65 over its previous close of Rs 58.80. It eventually settled 4.85 per cent lower at Rs 55.95.
Analysts said the level of Rs 56 is crucial to watch out for. A sharp fall below this level could bring in further weakness on the counter. They said the stock has strong resistance in the Rs 60-65 level range.
Sneha Seth, Derivatives Research Analyst at Angel One, said, “Recently, IDBI Bank recovered precisely from its 89 EMA (Exponential Moving Average) on the daily chart and 20-EMA on the weekly chart frame. That said, the stock is hovering around the cluster of resistance zone around Rs 60-65. Considering high volumes in the recent up move, we expect a continuation of ongoing rally beyond the mentioned resistance. Hence, it’s a buy-on-dip stock at around Rs 55-57-odd zone with a stop loss placed at Rs 52.”
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AR Ramachandran from Tips2trades said, “IDBI Bank looks bearish with immediate support at Rs 56. A daily close below this level could trigger a downtrend till Rs 48-46.7 in the coming days.”
The stock traded higher than 5-day, 20-, 50-, 100- and 200-day moving averages. IDBI Bank has a one-year beta of 1.08, as per data publicly available with Trendlyne, suggesting high volatility on the counter.
IDBI Bank’s 14-day relative strength index (RSI) came at 53.82. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company’s stock has a price-to-equity (P/E) ratio of 22.16.
A total of 30.26 lakh shares changed hands today, which was higher than IDBI Bank’s two-week average volume of 24.11 lakh shares. Turnover on the counter stood at Rs 17.07 crore. On Tuesday, the lender commanded a market capitalisation (m-cap) of Rs 60,159.69 crore.
There were 3,38,694 sell orders today against buy orders of 69,399 shares on BSE. On NSE, 3.31 crore shares traded for a value of Rs 176.64 crore.
On the earnings front, IDBI Bank reported a 46 per cent rise in net profit to Rs 828 crore for the second quarter that ended September 30 (FY23). Total income rose to Rs 6,065.51 crore from Rs 5,129.92 crore a year-ago, IDBI Bank said in a regulatory filing.
As of September 2022, promotors held 94.71 per cent of the lender. Life Insurance Corporation of India (LIC) alone owned 49.24 per cent of IDBI Bank, while the government held the rest 45.48 per cent.
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Meanwhile, Indian equity benchmarks fell sharply today, dragged by banks, financials and technology stocks. The 30-share BSE index plunged 631 points or 1.04 per cent to close at 60,115; while the broader NSE Nifty lost 187 points or 1.03 per cent to settle at 17,914.