Shriram Finance, Muthoot Finance in focus as financial stocks rally after RBI’s 50 bps rate cut; check key technical levels

The banking and financial services sector started the week strongly, with NIFTY Bank and NIFTY Financial Services index rising by 0.68% and 0.73%, respectively. Shares of Bajaj Finance, Muthoot Finance and Kotak Mahindra Bank, among others, are trading 2–3% higher.

Rate-sensitive stocks have rallied sharply since last week, when the Reserve Bank of India (RBI) cut the repo rate by 50 basis points to 5.50%, and announced a phased reduction of 100 basis points in the cash reserve ratio (CRR). So far in 2025, the RBI has lowered the repo rate by a total of 100 basis points.

According to experts, this is expected to release approximately ₹2.5 lakh crore of liquidity into the financial system in four instalments starting from September 2025. The CRR is expected to lower banks’ cost of funds, facilitating monetary policy transmission and moderating lending rates.

Overall, the RBI's repo rate and CRR cuts will benefit the banking sector by boosting loan demand and improving asset quality and profitability through lower default risk.

Technical view

The NIFTY Financial Services index broke its one month long consolidation and closed at record high levels on Friday. The index surpassed the crucial resistance zone of 26,726 and reclaimed the crucial resistance zone on a closing basis. This indicates that the short-term and the long-term trend of the index remains bullish with immediate support around 26,000 zones.

Stocks on radar

Shriram Finance formed a bullish engulfing candle on the weekly chart and is trading above its 21 and 50 weekly exponential moving averages. It also closed above the highs of the past two weeks, signaling bullish momentum. In the next few sessions, the stock may test the key resistance zone near ₹717. A decisive close above this level could lead to further gains. On the downside, support is seen around the ₹600 mark.

Cholamandalam Investment and Finance rebounded from the crucial support zone of 21 weekly exponential moving average. Additionally, it took support from the trendline connecting swing lows of January 2025 and April 2025. However, the stock has formed a doji candlestick pattern on the daily chart, signalling indecision.

SBI Cards surged by over 7% during the week, creating a bullish candle on the weekly chart. The stock reclaimed the key ₹933 resistance zone for the first time in two years, breaking out of a prolonged consolidation phase. This sharp move, coupled with the bullish pattern, suggests that a trend reversal may be imminent. Immediate support is now seen near ₹870.

Muthoot Finance reclaimed its 21-weekly exponential moving average and continued its bullish momentum last week. The stock closed at a record high level and zoomed past the crucial resistance zone of ₹2,435. The technical structure of the stock remains bullish with immediate support around ₹2,340. Unless the stock slips below this zone, it may sustain the bullish momentum.

Bullish outlook on Shriram Finance, SBI Cards and Muthoot Finance

For example, let’s look at Shriram Finance.

Disclaimer:

Derivatives trading must be done only by traders who fully understand the risks associated with them and strictly apply risk mechanisms like stop-losses. The information is only for educational purposes. We do not recommend any particular stock, securities and strategies for trading. The stock names mentioned in this article are purely for showing how to do analysis. Take your own decision before investing.