Bank Stocks Outlook for the week – 06 to 10.02.2017
Bank Stocks Outlook for the week – 06 to 10.02.2017
( www.rupeedesk.in )
Bank stocks are likely to be volatile in the upcoming week, ahead of the Monetary Policy Committee's interest rate decision on Wednesday. The resolution of the Monetary Policy Committee after the sixth bi-monthly policy review for 2016-17 (Apr-Mar) will be released on the Reserve Bank of India's website at 1430 IST on Wednesday. Several economists are expecting a 25-basis-point cut in repo rate to 6.00% from the current 6.25%. India's headline inflation figures for December fell to a 25-month low of 3.41%, thereby providing room for a cut in interest rate. However, the committee has surprised the markets in the past by maintaining status quo on repo rates, even as stakeholders were expecting a 50 bps cut post demonetisation. Stocks are seen taking cues from the decision on policy rates as they set the tone for banks' lending rates. In case of any major sell-off, the index is likely to witness some cushion near 19900. Other than the policy, Oct-Dec earnings by some banks will also lend cues to stocks in the sector. Bank of Baroda, Bank of India, IDBI Bank, and Union Bank of India will detail their earnings for the December quarter in the upcoming week. Bank of Baroda, which will report its earnings on Friday, gained 11% on week. The stock may continue its momentum in the near term. Union Bank and Bank of India will detail their earnings on Wednesday and Thursday, respectively, while IDBI Bank will disclose its earnings for the reporting quarter on Tuesday. Huge additions were also seen in the futures segment, while a sharp rise in prices indicated that the uptick was on the back of fresh additions of long positions. It's advisable to create fresh long positions in stocks like State Bank of India and Axis Bank.
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Bank Stocks Outlook for the week – 06 to 10.02.2017
( www.rupeedesk.in )
Bank stocks are likely to be volatile in the upcoming week, ahead of the Monetary Policy Committee's interest rate decision on Wednesday. The resolution of the Monetary Policy Committee after the sixth bi-monthly policy review for 2016-17 (Apr-Mar) will be released on the Reserve Bank of India's website at 1430 IST on Wednesday. Several economists are expecting a 25-basis-point cut in repo rate to 6.00% from the current 6.25%. India's headline inflation figures for December fell to a 25-month low of 3.41%, thereby providing room for a cut in interest rate. However, the committee has surprised the markets in the past by maintaining status quo on repo rates, even as stakeholders were expecting a 50 bps cut post demonetisation. Stocks are seen taking cues from the decision on policy rates as they set the tone for banks' lending rates. In case of any major sell-off, the index is likely to witness some cushion near 19900. Other than the policy, Oct-Dec earnings by some banks will also lend cues to stocks in the sector. Bank of Baroda, Bank of India, IDBI Bank, and Union Bank of India will detail their earnings for the December quarter in the upcoming week. Bank of Baroda, which will report its earnings on Friday, gained 11% on week. The stock may continue its momentum in the near term. Union Bank and Bank of India will detail their earnings on Wednesday and Thursday, respectively, while IDBI Bank will disclose its earnings for the reporting quarter on Tuesday. Huge additions were also seen in the futures segment, while a sharp rise in prices indicated that the uptick was on the back of fresh additions of long positions. It's advisable to create fresh long positions in stocks like State Bank of India and Axis Bank.
