Bank Stocks Outlook for the week – 13 to 17.06.2016
(Mostly cautious next week eyeing data cues)
( www.rupeedesk.in )
Bank stocks
are likely to trade on a cautious note next week, eyeing key economic data and global
cues, but there could be some value buying in select bank scripts. Weak April
India's industrial production at (-)0.8%, released after the market hours today
will also weigh
on the broad equity markets. Markets will also closely eye rate hike cues from the US
Federal Open Market Committee's meeting on Tue-Wed.
A
higher-than-expected CPI inflation print can dent hopes of rate cuts by the
Reserve Bank of
India, dampening sentiment for growth. The Bank Nifty was looking positive in the
coming week; with the possibility of select buying in some bank stocks that investors
could feel have hit their trough.
While all
government banks with high NPLs and private banks with high shares of project
loans gain from a peak in the NPL cycle and enhanced stress resolution, most govt. banks
(ex-SBI) don't have the requisite capital post the clean-up. Well capitalised private
banks and State Bank of India are seen as possible beneficiaries of these moves on the
regulatory and government front.
