Bank Nifty traded close to the psychologically important 58000 mark on August 26, supported by easing crude oil prices and improving global risk sentiment following developments around the Strait of Hormuz.

At around 11:15 am, the PSU Bank index gained 1%, while Bank Nifty advanced 0.6% and the Nifty Financial Services index rose 0.8%. Kotak Mahindra Bank and Axis Bank were among the key gainers within the banking index, rising around 3% and 1.4%, respectively.

Brent crude prices declined to around $86.3 a barrel after Iran and Oman discussed the possibility of establishing a temporary navigational corridor through the Strait of Hormuz and clearing the strategic waterway of mines. Expectations of smoother shipping through the key oil transit route eased concerns over energy supply disruptions and improved the external backdrop for Indian equities.

The United States has also started sending personnel back to some diplomatic missions in the Middle East that had earlier been evacuated or downsized amid the conflict with Iran, according to people familiar with the matter cited by Reuters.

"Easing crude prices have improved the external backdrop for Indian equities and hopes of smoother Strait of Hormuz shipping have supported global risk sentiment," said Hitesh Tailor, technical research analyst at Choice Broking.

Fundamentally, Indian banks continue to remain well positioned. Bernstein analysts said Indian banks are in their strongest shape in years, supported by healthy loan growth, resilient margins and benign asset quality. Public sector lenders have also outperformed private peers on profitability, helped by stronger interest income growth and margins.

From a technical perspective, Bank Nifty remains in a consolidation phase. The index is trading around its key moving averages, with the 200 day moving average close to current levels and the 20 day and 50 day moving averages marginally above the index.

According to Vatsal Bhuva, Technical Analyst at LKP Securities, Bank Nifty continues to trade within a broader range of 57000 to 58000, with the 58000 to 58200 zone acting as a crucial resistance area. A decisive breakout or breakdown from this range could determine the next directional move, while traders may continue to adopt a range bound approach until a clearer trend emerges.

Bajaj Broking Research also highlighted the 58000 level as an important resistance point. The index formed a small bullish candle while remaining largely within the previous session's range, indicating consolidation with a positive bias after buying emerged near the 50 day exponential moving average.

The broader eight week consolidation range remains between 56500 and 58700. A sustained move above 58000 could open the way toward 58500 to 58700, while failure to break the resistance could keep Bank Nifty within the 57000 to 58000 range in the near term.