Nifty Bank Poised to Reach 60,000 Level; HDFC and PNB Among Top Bank Stock Picks, Says Rahul Sharma of JM Financial
By Smart Money Mindset | Published June 2, 2025
Despite recent volatility in the Indian stock market, Rahul Sharma, Director and Head of Technical & Derivative Research at JM Financial Services, remains optimistic about the prospects of the Nifty and Nifty Bank indices. Sharma highlights key opportunities for investors, particularly in banking stocks such as HDFC Bank and Punjab National Bank (PNB), which feature among the top seven bank stock picks by JM Financial.
Nifty and Bank Nifty: Current Trends and Projections
Sharma notes that while the Nifty index has exhibited what appears to be a "one step forward, one step backward" consolidation pattern recently, a broader analysis reveals a clear upward trend. The Nifty has been consistently forming "higher high" and "higher low" structures, signaling sustained bullish momentum.
Although the index faces resistance near its all-time high of approximately 26,277, Sharma estimates there is about a 5% upside potential from current levels around 25,000 points. This projected movement is significant, especially considering that Nifty already garnered an impressive 15.5% return between April 7th and May 15th over just 24 trading days.
Medium-term technical targets for Nifty include levels of 25,250, 25,650, and 25,800 points. Sharma cautions that the market may not experience a one-sided rally but will likely move in a zigzag fashion. Key support is established between the 23,800 and 24,000 level, with any decisive break below this zone potentially dragging the index down towards 23,400 points.
When it comes to Bank Nifty, the outlook is even more exuberant. After reclaiming all-time highs and rallying over 17%, the banking index is entrenched in a trading range with resistance around 56,100 and support near 53,500 points. Sharma anticipates the upward momentum to persist, projecting the Bank Nifty may hit the 59,000 mark and potentially climb to 60,000 points—a milestone that would thrill market participants.
Achieving a close above the 56,100 resistance level is critical for bulls to maintain control and reignite bullish sentiment in the banking space. Conversely, a drop below 53,500 could result in corrective pressure.
Recommended Bank Stocks for Investors
In line with this bullish view on Bank Nifty, Sharma identifies several promising banking stocks suited for accumulation, especially once Bank Nifty decisively breaks above 56,100 points. These include:
- HDFC Bank
- Punjab National Bank (PNB)
- Canara Bank
- Bank of Baroda
- Bank of India
- IDFC First Bank
- Axis Bank
Sharma also suggests that investors explore opportunities in non-banking financial companies (NBFCs) amid the prevailing market conditions.
Market Strategy: Focus on Quality Stocks and Sector Rotation
Sharma advises that the current market environment is suitable for selectively accumulating quality stocks. He underscores the importance of a discerning approach focused on sector rotation, aiming to identify stocks showing robust relative strength alongside fundamental support such as strong Q4 earnings reports.
He emphasizes that many companies have already released their Q4 results, enabling investors to filter stocks that display positive technical patterns or breakouts, especially those whose earnings are improving or stabilizing after weaker previous quarters. Sharma highlights that any lingering negative expectations are likely priced in, making strength post-results a reliable signal for medium-term accumulation.
Additionally, mid-cap and small-cap stocks are showing promising technical patterns, with Sharma pointing to the formation of "higher high" and "higher low" structures in these segments. These smaller stocks may outperform even if the Nifty consolidates. For stocks that have experienced recent sharp price increases, Sharma recommends patiently waiting for a retracement to optimize entry points from a risk-to-reward perspective.
Reliance Industries: Current Technical Outlook
Addressing the outlook for Reliance Industries—one of the market and index heavyweights—Sharma notes that the stock has been consolidating after a noteworthy rally. Reliance played a major role in driving Nifty’s strong move from April to mid-May.
The stock faces stiff resistance at around ₹1,465. A decisive break above this level could pave the way for further gains targeting ₹1,500, ₹1,550, and potentially higher levels. However, Sharma advises investors to consider waiting for a minor retracement or to accumulate gradually in tranches to manage risk effectively. Support zones to watch are near ₹1,380 and ₹1,320, where the stock may find buying interest as momentum indicators shift from positive toward neutral.
Sectors to Watch in the Next 3–6 Months
Looking ahead over the next three to six months, Sharma identifies several sectors with promising growth potential, including:
- Metals
- Media
- Realty
- Public Sector Enterprises (PSEs)
- Chemicals
- Plastic Product Manufacturing
Investors are encouraged to focus on these areas to capitalize on upcoming opportunities as the market evolves.
Conclusion
Rahul Sharma of JM Financial expresses a cautiously optimistic view on Indian equities, particularly emphasizing the strong potential for Nifty Bank to rally further toward 60,000 points. Strategic investment in quality banking stocks such as HDFC Bank and PNB, combined with a sector rotation strategy focusing on strong fundamentals and technicals, can help investors navigate the current market environment effectively.
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Disclaimer: This article is for informational and educational purposes only. The views presented reflect those of the individual analyst and JM Financial and do not constitute investment advice. Investors should consult with certified financial advisors before making investment decisions.
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