Bank Stocks Outlook for the week – 08 to 11.03.2016
( www.rupeedesk.in )
Bank
stocks are expected to take cues next week from the outcome of the ongoing
bankers'
retreat--'Gyan Sangam'--being held at Gurgaon in Haryana, although the
mood
remains buoyant for lenders.
Yesterday,
share price of public sector banks ended up 1-9% on expectations that the
government
will announce measures on their recapitalisation, asset quality resolution,
and
clarity on consolidation in the sector in the coming days.
Banks
have had a stellar week, with Monday's 2016-17 (Apr-Mar) Budget which has
raised
hopes of a repo rate cut from the central bank—followed by a revision in the
capital
treatment norms for banks.
Under
the revised norms, banks can now revalue reserves arising from a change in the
carrying
amount of their property as common equity tier-I capital with a 55%
discount,
among other amendments. The revision in the norms comes at a time when
Indian
banks are facing stress on their tier-I capital levels, particularly in light
of the
recent
asset quality review by the central bank.
Next
week, bank stocks are seen gaining further, with the Nifty Bank set to rise by
another
200-250 points. Yesterday, the Nifty Bank index ended up 1% at 15339.20
points,
while Nifty PSU Bank closed up 3.3% at 2388.75.