Bank Stocks Outlook
for the week – 11 to 15.07.2016
(May move with
positive bias next week; CPI eyed)
Stocks of banks are seen trading with a positive bias next
week, with market participants eyeing retail
inflation data for June for cues on further monetary easing
by the Reserve Bank of India. Having risen to a 21-month high of 5.76% in May, June's
Consumer Price Index inflation figure, to be
released Tuesday, is keenly awaited as it would be the last
inflation print before the central bank's third bi-monthly monetary policy statement on Aug 9. Yesterday,
the Nifty Bank ended at 18016.25,
posting a 0.2% rise for the week.
Apart from inflation data, next week also sees banks' Apr-Jun
financial results starting in earnest
South Indian Bank yesterday announced its results for the
first quarter of 2016-17 (Apr-Mar), although the numbers of some of the larger lenders will be more
keenly eyed. Private sector bank IndusInd Bank will detail its earnings on Monday.
Apr-Jun will be the first quarter after the impact of RBI's
asset quality review, which saw banks' nonperforming assets and provisions mounting, leading to cumulative losses
of nearly 400 bln rupees over Oct-Mar for public sector banks.
