Banking
stocks are seen rangebound with a negative bias next week as many traders and investors
would await State Bank of India's Oct-Dec earnings before deciding on their positions
in banks' stocks. The country's largest state-owned bank, SBI, will detail its earnings
for Oct-Dec on Friday. Most traders will await SBI results as it would provide
a broader
and clearer perspective on the whole sector and its outlook going forward.
Apart from
SBI, private lenders Dhanlaxmi Bank and Lakshmi Vilas Bank will also detail
their results
for Oct-Dec next week. If the net profit of SBI is more-than-expected, then
SBI's stocks
could cross the price of 1,600 rupees per share. SBIN
(State Bank of India) has added significant amount of short positions and
rollovers have
also have been very strong. After tepid QIP (qualified institutional placement) response,
hike in interest rate stock has been under pressure. SBI, Kotak Mahindra Bank, and
Bank of Baroda are starting the new series with significantly higher open
interest indicating
prevailing short bias among these stocks. Action in bank stocks would also depend
on key economic data that would be detailed next week as it would provide clarity
on the Reserve Bank of India's monetary policy stance that impacts banks' performances. The
Central Statistics Office will detail India's index for industrial production
for December
and Consumer Price Index-based inflation for January on Wednesday. While the
commerce ministry will detail Wholesale Price Index-based inflation for January
on Friday.
Comments from finance ministry officials on retail loan-linked capital infusion
in state-owned
banks would also be keenly watched. In January, Cogencis reported that the finance
ministry has asked state- owned banks to give details of their credit growth during
the festival season by Jan 31 to check their eligibility for additional capital infusion.
The government, which has already infused 140 bln rupees in public sector banks,
has promised further capital infusion after ascertaining their retail lending performance between
October and January.
