Bank Stocks Outlook for the week – 08 to 12.06.2015
(Seen
trading with negative bias next week)
( www.rupeedesk.in )
Bank
stocks are expected to trade with a negative bias next week, tracking weakness
in the broad market. Despite a 25-basis-point cut in repo rate by the Reserve
Bank of India at its second bimonthly monetary policy statement of 2015-16
(Apr-Mar) on Tuesday, cautious commentary by Governor Raghuram Rajan coupled
with a weak monsoon forecast dented market sentiment.
The
India Meteorological Department forecast showed a 12% deficiency in southwest
monsoon during 2015, worse than its April prediction of a 7% deficiency.
Subsequently,
CRISIL Research revised its 2015-16 India gross domestic product estimate by 50
basis points to 7.4% from 7.9% earlier, citing monsoon woes.
Market
will closely watch the unfolding of monsoon development before taking a view.
There will also be some caution ahead of the IIP (index of Industrial
production) and CPI (consumer price index) inflation numbers.
Release
of April IIP and May CPI data by the Central Statistics Office is due Friday.
We currently overweight on private sector banks, and were limiting their
exposure to public sector peers.
