Banks Stocks Outlook for
the week – 19 to 23.09.2016
Seen up next week as
US Fed rate hike fears wear
Bank is seen rising next week as fears of the US Federal
Reserve hiking interest rates recede and the
charts support gains. The Federal Open Market Committee's
two-day meeting will conclude post
Indian market hours on Wednesday. While most investors
expect the FOMC to not raise interest
rates, Fed Chair Janet Yellen's policy guidance will be
closely eyed for cues regarding the pace and
timing of rate increases in future. Investors will also take
cues from Bank of Japan's policy meeting,
this decision as well being detailed on Wednesday. We are
expected recovery in the stocks of select
private sector banks may also support broader indices.
In the current week, fall in the stocks of YES Bank had
weighed on its peers. Its qualified institutional placement being deferred ensured that the bank's share price
fell 8.3% over the week, the largest decline among the large banks. We expected the Nifty Bank
index to outshine the Nifty 50 in days to come and head towards the 20500-20800 levels shortly. ICICI
Bank is likely to be under focus as the initial public offering of its subsidiary ICICI Prudential
Life Insurance Co will open on Monday. The offer will be watched as it is the first IPO in the
insurance sector. The extent of success of ICICI Life Insurance issue would show the extent of liquidity in the
system and the willingness of the investors to invest in equities.
