Bank Stocks Outlook for the week – 15 to 18.11.2016
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Bank stocks are seen rising in the upcoming truncated week
as headline inflation rate is seen falling
to a 14-month low of 4.1% in October. The Nifty Bank index
is seen finding resistance at 19500
points and finding support at 19200-levels. Yesterday, the
bank index ended at 19738.80, up 3.5%
on week.
Stocks are likely to take cues from inflation data for
October, scheduled to be released next week,
and industrial production data for September which was
released yesterday. Industrial production
in September grew only 0.7%, marginally beating the estimate
of 0.5%, but much lower than the
3.7% growth recorded a year ago. Inflation based on the
Consumer Price Index - CPI (Combined)
and that based on the Wholesale Price Index will be released
on Tuesday after market hours.
Volatility is seen continuing in bank stocks, giving a
broader trading range.
The Nifty Bank, which managed to break out from its
declining trend, is expected to move up
further. Considering this, we strongly believe dips till
19500 can be utilized for accumulating quality
banking stocks especially, PNB, Yesbank, Bankbaroda,
Bankindia.
Bank of Baroda, which gained 12.6% this week, is likely to be
in focus on Tuesday after the lender
detailed its earnings post market hours yesterday. The
lender last day posted a 343.5% on-year
increase in its Jul-Sep net profit at 5.52 bln rupees on
account of higher other income and lower
Provisioning costs.