Bank Stocks Outlook for the week – 07 to 11.08.2017
Bank Stocks Outlook for the week – 07 to 11.08.2017
( www.rupeedesk.in )
The Bank stocks are likely to rise and outpace broader markets next week, with stockspecific action likely from earnings announcements by some large state-owned and small private-sector banks. However, on technical factors, the recent all-time high for the banking index is expected to emerge as a resistance. We expect the recent all-time high hit by index to act as a hurdle and see it consolidate
near 24700 levels. We feel the recent high is likely to act as a stiff hurdle. Going forward, the index is likely to slide towards 24500. Additionally, Reserve Bank of India's decision to cut repo rate by just 25 basis points on Wednesday, even as it flagged inflation risks and maintained a neutral stance on monetary policy, has also dampened banking stock investors' expectations of future policy rate reductions. Earnings due over the weekend and in the coming week such as those of Syndicate Bank,
Bank of India, Bank of Baroda, Union Bank of India, Indian Overseas Bank, Dhanlaxmi Bank, Allahabad Bank, Corporation Bank, Punjab National Bank, City Union Bank, Oriental Bank of Commerce and the first results of the combined post-merger State Bank of India. SBI's management has already guided for slightly muted earnings in Apr-Jun, due to the costs related towards managing the transition of erstwhile associate bank provisions to its own levels and other operational expenses linked to managing one-off costs such as voluntary retirement of some staff and technology spend.
While most of the state-owned banks are expected to report muted earnings, Bank of Baroda and State Bank of India could surprise on the upside, due to the higher level of asset quality provisions made by these lenders in the past. Axis Bank and Canara Bank, which have seen a build up in short positions in recent sessions, are likely to see profit booking in the coming sessions.
Bank Stocks Outlook for the week – 07 to 11.08.2017
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Bank Stocks Outlook for the week – 07 to 11.08.2017
( www.rupeedesk.in )
The Bank stocks are likely to rise and outpace broader markets next week, with stockspecific action likely from earnings announcements by some large state-owned and small private-sector banks. However, on technical factors, the recent all-time high for the banking index is expected to emerge as a resistance. We expect the recent all-time high hit by index to act as a hurdle and see it consolidate
near 24700 levels. We feel the recent high is likely to act as a stiff hurdle. Going forward, the index is likely to slide towards 24500. Additionally, Reserve Bank of India's decision to cut repo rate by just 25 basis points on Wednesday, even as it flagged inflation risks and maintained a neutral stance on monetary policy, has also dampened banking stock investors' expectations of future policy rate reductions. Earnings due over the weekend and in the coming week such as those of Syndicate Bank,
Bank of India, Bank of Baroda, Union Bank of India, Indian Overseas Bank, Dhanlaxmi Bank, Allahabad Bank, Corporation Bank, Punjab National Bank, City Union Bank, Oriental Bank of Commerce and the first results of the combined post-merger State Bank of India. SBI's management has already guided for slightly muted earnings in Apr-Jun, due to the costs related towards managing the transition of erstwhile associate bank provisions to its own levels and other operational expenses linked to managing one-off costs such as voluntary retirement of some staff and technology spend.
While most of the state-owned banks are expected to report muted earnings, Bank of Baroda and State Bank of India could surprise on the upside, due to the higher level of asset quality provisions made by these lenders in the past. Axis Bank and Canara Bank, which have seen a build up in short positions in recent sessions, are likely to see profit booking in the coming sessions.
Bank Stocks Outlook for the week – 07 to 11.08.2017
