Bank Stocks Outlook for the week – 10 to 14.04.2017
Bank Stocks Outlook for the week – 10 to 14.04.2017
( www.rupeedesk.in )
Bank stocks are seen volatile in the upcoming truncated week, as market participants will be squaring off existing positions and building new ones ahead of the Jan-Mar earnings season. However, sector heavyweights are seen trading in a range due to lack of unidirectional triggers and on overall positive sentiment for the sector. Markets will be closed on the last day of the week for Good Friday. The Bank Nifty/Nifty price ratio continues to consolidate above 2.30 levels, and till it is trading above this level, banking index may resume upsides in the days to come. Yesterday, Nifty Bank ended down 0.9% at 21431.15 points. Bank stocks will also take cues from data on consumer price index-based inflation for March, and the February data for industrial production, both scheduled for release on Wednesday. While public sector banks took comfort from the Reserve Bank of India's reiteration, in the bi-monthly Monetary Policy Committee meet, that they will continue to work towards orderly resolution of stressed assets, the central bank's expectation of public banks needing further capital infusion dampened market sentiment a little. In the two-day meet that ended Thursday, RBI kept the policy rate unchanged but narrowed the Liquidity Adjustment Facility corridor by raising the reverse repo rate to 6% and slashing the Marginal Standing Facility by 25 basis points to 6.50%. Overall, expectation from banks' earnings is positive and participants remain bullish on the sector as banks and financial sector companies are among the few seen reporting positive results, despite persistent asset quality concerns. While earnings of retail-heavy private banks are expected to be stable, those of corporate-heavy banks such as ICICI Bank and Axis Bank will be under pressure on elevated credit costs.
Source : Cogencis Information Services Ltd.
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Bank Stocks Outlook for the week – 10 to 14.04.2017
( www.rupeedesk.in )
Bank stocks are seen volatile in the upcoming truncated week, as market participants will be squaring off existing positions and building new ones ahead of the Jan-Mar earnings season. However, sector heavyweights are seen trading in a range due to lack of unidirectional triggers and on overall positive sentiment for the sector. Markets will be closed on the last day of the week for Good Friday. The Bank Nifty/Nifty price ratio continues to consolidate above 2.30 levels, and till it is trading above this level, banking index may resume upsides in the days to come. Yesterday, Nifty Bank ended down 0.9% at 21431.15 points. Bank stocks will also take cues from data on consumer price index-based inflation for March, and the February data for industrial production, both scheduled for release on Wednesday. While public sector banks took comfort from the Reserve Bank of India's reiteration, in the bi-monthly Monetary Policy Committee meet, that they will continue to work towards orderly resolution of stressed assets, the central bank's expectation of public banks needing further capital infusion dampened market sentiment a little. In the two-day meet that ended Thursday, RBI kept the policy rate unchanged but narrowed the Liquidity Adjustment Facility corridor by raising the reverse repo rate to 6% and slashing the Marginal Standing Facility by 25 basis points to 6.50%. Overall, expectation from banks' earnings is positive and participants remain bullish on the sector as banks and financial sector companies are among the few seen reporting positive results, despite persistent asset quality concerns. While earnings of retail-heavy private banks are expected to be stable, those of corporate-heavy banks such as ICICI Bank and Axis Bank will be under pressure on elevated credit costs.
Source : Cogencis Information Services Ltd.