Bank Stocks Outlook for the Week – 06 to 10.04.2015
The Reserve Bank of India's first bi-monthly policy statement
scheduled Tuesday would lend cues to bank stocks next week with expectations
that stocks may extend gains on Monday amid hope of a rate cut by the central
bank.
The equity market is abuzz with talks of a repo rate cut by the
RBI. Some quarters of the market are also expecting a reduction in banks' cash
reserve ratio. So far in 2015, the RBI has reduced repo rate by a total of 50
basis points to 7.50%.
In a report released earlier this month, State Bank of India's
economic research department said the RBI should cut banks' CRR requirement by
50 basis points to 3.50% before the Apr 7 monetary policy statement, as that
would help banks reduce their lending rates. CRR cut would ease up a lot of cash
for the bank and further improve liquidity condition and ease cost of funds.
Towards the end of the next week, stock-specific action is
expected as the market is likely to react to news flows ahead of the Jan-Mar
results season. Usually, the sector's quarterly earnings start with IndusInd
Bank. The private sector lender will detail its Jan-Mar results on Apr 16.
