Bank Stocks Outlook for the week – 31.08.2015 to 04.09.2015
(Bias
negative next week; Apr-Jun GDP eyed)
Shares
of banks are expected to extend their losses next week tracking possible
weakness in the
broad
markets, that any positive surprises in Apr-Jun gross domestic product growth
can lead to
gains
in the first half of the week.
The
Central Statistics Office will detail GDP data after trading hours on Monday.
India's GDP
growth
is likely to have marginally moderated in the first quarter of 2015-16
(Apr-Mar), primarily pulled down by the services sector.
Any
improvement in the economy is likely to be reflected in credit growth of banks.
CARE Ratings said that with an expected revival in the economy and softening of
interest rates, banks' advances are expected to grow in the range of 11-12% in
2015-16.
However,
asset quality pressure would continue to remain in FY16, as fresh restructuring
will
classify
as NPA (non-performing asset) and we may also see slippages from the existing
stock of
restructured
assets.
Overall
trend looks weak on charts. Even if there is a mid-week bounce back, the
strategy should
still be sell-on-rise.