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Bank stocks are likely to remain range-bound with a negative bias in the coming week on likely selling pressure following the Reserve Bank of India's hawkish guidance at its annual policy statement on Friday. With 75 basis points already coming through from January to date, the RBI has front loaded its monetary policy action and the scope for any further cut is 'little' as the RBI itself puts it. The hawkish statement by the governor reaffirms our belief. We expect not more than 25 basis points incremental reduction in repo till December 2013.
Most banks have indicated they will not be able to cut loan or deposit rates despite the policy easing by the Reserve Bank of India as deposit rates are high due to weak deposit growth. Market is not expecting any positive cues from Jan-Mar earnings of banks, especially state-owned banks that will be released in the coming week. Most of the state-owned banks have shown weak asset quality and lower profitability in the quarter ended Mar 31.
South Indian Bank, State Bank of Bikaner and Jaipur, UCO Bank, Allahabad Bank, Corporation Bank, Punjab National Bank, Union Bank of India, Central Bank of India, United Bank of India are the banks that will announce Jan-Mar earnings in the coming week.
Bank stocks are likely to remain range-bound with a negative bias in the coming week on likely selling pressure following the Reserve Bank of India's hawkish guidance at its annual policy statement on Friday. With 75 basis points already coming through from January to date, the RBI has front loaded its monetary policy action and the scope for any further cut is 'little' as the RBI itself puts it. The hawkish statement by the governor reaffirms our belief. We expect not more than 25 basis points incremental reduction in repo till December 2013.
Most banks have indicated they will not be able to cut loan or deposit rates despite the policy easing by the Reserve Bank of India as deposit rates are high due to weak deposit growth. Market is not expecting any positive cues from Jan-Mar earnings of banks, especially state-owned banks that will be released in the coming week. Most of the state-owned banks have shown weak asset quality and lower profitability in the quarter ended Mar 31.
South Indian Bank, State Bank of Bikaner and Jaipur, UCO Bank, Allahabad Bank, Corporation Bank, Punjab National Bank, Union Bank of India, Central Bank of India, United Bank of India are the banks that will announce Jan-Mar earnings in the coming week.
