Bank Stocks Outlook
for the week – 29.08.2016 to 02.09.2016
Banking stocks are expected to consolidate with a positive
bias next week. The Nifty
Bank index is expected to be in the range of 19050-19400
points. The Nifty Bank ended
1.1% lower for the week at 19195.75 points on Friday.
A major trigger for stocks was expected to be US Federal
Reserve Chair Janet Yellen's
speech at the Jackson Hole Economic Policy Symposium late
Friday. While Yellen did
say that the case for an increase in the federal funds rate
had "strengthened in recent
months", she did not give indications on its timing,
only reiterating that the central bank
continued to be data dependent.
Domestically, GDP data for Apr-Jun, slated to be released
post market hours on
Wednesday, should also lend cues for the second half of next
week. In Jan-Mar, India's
GDP grew at a one-and-a-half year high of 7.9%, taking the
growth rate for 2015-16
(Apr-Mar) to 7.6%. However, in mid-July, the International
Monetary Fund cut its
forecast for India's GDP growth in 2016-17 by 10 basis
points to 7.4%.
With the market consolidating near higher band of 8700,
underperforming sectors have
also started to witness risk-reward based plays. The PSU
banking space is one such,
which has been broadly moving up on short-covering theme.
Canara Bank has also
moved up on short covering and multi-year high volume price
of Rs. 245 is the key
support level for current upsides.