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While overall sentiment is upbeat, Bank stocks are not expected to continue their recent surge, with bouts of profit-booking a possibility. The (Banking sector) market is overbought at the moment, and even though an upside of 4-5% is possible over the coming days, we can expect profit-booking at around 12250-12500 levels. Yesterday, benchmark share indices ended at record closing highs, scaling lifetime highs intraday on back of sustained inflows from foreign institutional investors and domestic institutional investors. Bank stocks led the rally with ICICI Bank, Axis Bank, IndusInd Bank, Bank of Baroda, and State Bank of India, Punjab National Bank and Yes Bank improving 5-10% in recent days.
We expect Mid-Cap and Small Cap Banks to do well next week as they strongly consolidated with positive bias. Banks like Union Bank, Allahabad Bank, Indian Bank, UCO Bank and Syndicate Bank are in the queue to rally. Minor profit booking is likely to happen in large cap Banks such as Bank of Baroda, Punjab National Bank, Axis Bank, ICICI Bank and IndusInd Bank. Any fall in stocks, particularly public sector ones, provides a buying opportunity, as they have already corrected in recent past.
Inflation data for February will be released next week, and a further decline in inflation rate is expected, which would effectively rule out a repo rate hike by Reserve Bank of India in its April policy review. In January, inflation based on Consumer Price Index (Combined) fell for second consecutive month, declining to 8.79% from 9.87% in December and an all-time high of 11.16% in November. Wholesale Price Index-based inflation also fell to 5.05% in January from 6.16% December. Next week, Bank Nifty is seen taking support at 11300 points and facing resistance at 12230 points. Yesterday, index closed at 11884.75 points, up 5.4% after touching a near-three month high of 11947.50 points intraday.
While overall sentiment is upbeat, Bank stocks are not expected to continue their recent surge, with bouts of profit-booking a possibility. The (Banking sector) market is overbought at the moment, and even though an upside of 4-5% is possible over the coming days, we can expect profit-booking at around 12250-12500 levels. Yesterday, benchmark share indices ended at record closing highs, scaling lifetime highs intraday on back of sustained inflows from foreign institutional investors and domestic institutional investors. Bank stocks led the rally with ICICI Bank, Axis Bank, IndusInd Bank, Bank of Baroda, and State Bank of India, Punjab National Bank and Yes Bank improving 5-10% in recent days.
We expect Mid-Cap and Small Cap Banks to do well next week as they strongly consolidated with positive bias. Banks like Union Bank, Allahabad Bank, Indian Bank, UCO Bank and Syndicate Bank are in the queue to rally. Minor profit booking is likely to happen in large cap Banks such as Bank of Baroda, Punjab National Bank, Axis Bank, ICICI Bank and IndusInd Bank. Any fall in stocks, particularly public sector ones, provides a buying opportunity, as they have already corrected in recent past.
Inflation data for February will be released next week, and a further decline in inflation rate is expected, which would effectively rule out a repo rate hike by Reserve Bank of India in its April policy review. In January, inflation based on Consumer Price Index (Combined) fell for second consecutive month, declining to 8.79% from 9.87% in December and an all-time high of 11.16% in November. Wholesale Price Index-based inflation also fell to 5.05% in January from 6.16% December. Next week, Bank Nifty is seen taking support at 11300 points and facing resistance at 12230 points. Yesterday, index closed at 11884.75 points, up 5.4% after touching a near-three month high of 11947.50 points intraday.
