Karnataka Bank Ltd Gains 10.00%: 4 Key Factors Driving the Week’s Momentum

2 February 2026: Technical Momentum Turns Mildly Bearish Amid Volatility

Karnataka Bank Ltd began the week under pressure, with its technical momentum shifting from mildly bullish to mildly bearish. The stock closed at Rs.179.70, down 1.26% on the day, underperforming the Sensex which fell 1.03%. Key technical indicators such as MACD and Bollinger Bands signalled increased selling pressure, with the stock gravitating towards the lower band. The Relative Strength Index (RSI) remained neutral, indicating no clear directional bias. This cautious technical stance reflected broader market volatility and set a subdued tone for the opening session.

The stock’s 52-week trading range of Rs.162.20 to Rs.220.35 highlighted the potential for volatility, and the bearish MACD crossover on weekly charts suggested possible near-term consolidation or correction. Despite this, daily moving averages still showed mild bullishness, indicating a transitional phase rather than a decisive downtrend.

3 February 2026: Sharp Intraday Surge Reverses Early Weakness

On 3 February, Karnataka Bank Ltd staged a remarkable recovery, surging 8.07% to close at Rs.194.20 after hitting an intraday high of Rs.194.45, a 7.74% gain on the day. This rally reversed the prior day’s bearish momentum and outpaced both the private sector banking sector’s 2.56% gain and the Sensex’s 2.63% rise. The stock opened with a 2.95% gap up, signalling strong buying interest and technical resilience.

Despite the strong price action, the stock remained below its 50-day moving average, suggesting some resistance in the medium term. The Mojo Score stood at 50.0 with a Hold rating, reflecting a cautious analyst stance despite the price strength. This day’s performance marked a key inflection point, demonstrating the stock’s capacity to rebound sharply amid mixed market conditions.

3 February 2026: Valuation Metrics Reflect Changing Market Sentiment

Alongside the price surge, Karnataka Bank’s valuation profile underwent a subtle shift. The bank’s price-to-earnings (P/E) ratio stood at 5.93, remaining attractive relative to peers such as Karur Vysya Bank (P/E 12.45) and Bandhan Bank (P/E 23.8). The price-to-book value (P/BV) ratio was low at 0.54, underscoring the stock’s valuation appeal despite a downgrade in its mojo grade from Buy to Hold.

However, the valuation grade moved from “very attractive” to “attractive,” signalling a cautious recalibration by the market. Elevated net non-performing assets (NPAs) at 7.75% and a modest return on equity (ROE) of 9.11% tempered enthusiasm. The dividend yield of 2.78% provided some income support amid these concerns.

Short-term price performance was mixed, with the stock outperforming the Sensex over the week but underperforming over the month and year-to-date periods. Long-term returns remained robust, with five-year gains of 178.28% and ten-year gains of 150.88%, highlighting the bank’s resilience despite recent volatility.

4 February 2026: Continued Uptrend with Moderate Gains

On 4 February, Karnataka Bank Ltd extended its gains, closing at Rs.198.85, up 2.39%. The stock traded within a range of Rs.192.50 to Rs.200.90, nearing its 52-week high of Rs.220.35. This price action reflected a continuation of the bullish momentum initiated the previous day, supported by daily moving averages indicating strengthening upward trends.

Despite this, weekly and monthly technical indicators such as MACD and Know Sure Thing (KST) remained mildly bearish, suggesting caution among longer-term investors. Bollinger Bands on the weekly chart turned bullish, signalling expanding volatility to the upside, while monthly bands indicated consolidation. On-Balance Volume (OBV) readings were mildly bearish, indicating volume trends did not fully confirm the price gains.

5 February 2026: Technical Momentum Shifts to Mildly Bullish Amid Mixed Signals

Karnataka Bank Ltd closed the week on 5 February at Rs.200.20, up 0.25%, marking a mild continuation of the upward trend. Technical momentum shifted from mildly bearish to mildly bullish on daily charts, though weekly and monthly indicators remained mixed. The stock’s price hovered above key short-term moving averages, signalling tentative optimism.

However, longer-term momentum oscillators and Dow Theory assessments remained cautious, reflecting the complex interplay of bullish and bearish signals. The Mojo Score improved to 65.0 with a Hold rating, maintaining a balanced analyst outlook. Investors were advised to monitor key support near Rs.192 and resistance around Rs.201 to assess the sustainability of the rally.

Daily Price Performance vs Sensex

Key Takeaways

Positive Signals: Karnataka Bank Ltd outperformed the Sensex by a wide margin, gaining 10.00% versus the benchmark’s 1.51% over the week. The sharp rebound on 3 February, with a 7.74% intraday surge, demonstrated strong buying interest and technical resilience. Daily moving averages and bullish Bollinger Bands on the weekly chart suggest strengthening short-term momentum. The bank’s attractive valuation metrics, including a low P/E of 5.93 and P/BV of 0.54, continue to offer a valuation cushion relative to peers.

Cautionary Signals: Despite short-term gains, weekly and monthly technical indicators such as MACD and KST remain mildly bearish, indicating underlying momentum weakness. Volume trends, as reflected by On-Balance Volume, do not fully confirm the price rally, suggesting limited conviction. Elevated net NPAs at 7.75% and a modest ROE of 9.11% highlight asset quality and profitability challenges. The downgrade in mojo grade from Buy to Hold reflects analyst caution amid mixed signals.

Investors should monitor key support levels near Rs.192 and resistance around Rs.201 to gauge the sustainability of the current uptrend. The divergence between daily bullishness and longer-term caution underscores the importance of a balanced approach in assessing Karnataka Bank’s near-term outlook.

Conclusion

Karnataka Bank Ltd’s week was characterised by a significant price recovery and technical momentum shifts that propelled the stock to a 10.00% gain, substantially outperforming the Sensex. The sharp rebound on 3 February marked a pivotal moment, reversing early bearishness and signalling renewed investor interest. Valuation metrics remain attractive, though a recent downgrade to Hold and mixed technical signals counsel prudence.

The interplay of bullish daily indicators and cautious weekly and monthly trends suggests a transitional phase for the stock. While short-term momentum appears positive, the lack of strong volume confirmation and ongoing asset quality concerns warrant careful monitoring. Overall, Karnataka Bank Ltd’s performance this week reflects a complex but promising scenario, with potential for further gains tempered by the need for vigilance amid mixed market signals.

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