Bank Stocks Outlook for the week – 18 to 22.04.2016
( www.rupeedesk.in )
Bank
stocks are seen extending gains next week, with the Nifty Bank having ended the
current
truncated week over 4.5% higher last week.
As
the banking index managed to end above 16000, call writers of this strike have become
vulnerable and could be forced to close their positions leading to further
short
closure.
We believe sustainability of 16000 is likely to lead upsides till 16800.
Last
trading day the index ended at 16278.55 points as hope of another repo rate cut
from the Reserve Bank of India built up after softer-than-expected headline
retail inflation for March. Consumer Price Index-based inflation in March fell
to 4.83% from 5.26% in February, data released Tuesday showed.
The
RBI, which uses CPI inflation as the nominal policy anchor, is aiming to cut inflation
to 5% by March 2017. Having cut the repo rate by 125 basis points in 2015, the
central bank again cut the policy rate by 25 bps on Apr 5 to 6.50%.
Also
seen aiding banking shares and rate cut hopes are forecasts of above-normal monsoon
by the India Meteorological Department, which came as a major relief for the
economy
after two years of sub-par rains.
