BANK STOCKS OUTLOOK FOR THE WEEK – 15 TO 19.09.2014
( www.rupeedesk.in )
Bank stocks will continue to trade with a positive bias next week but momentum is seen
more in the mid-cap space due to renewed buying in these scrips.
There has been resumed buying in PSU (public sector) banks as most of them were doing
really bad following the news of scams and fraud. Now some recovery is expected. I
expect 4-5% upside in mid-cap PSU bank stocks. Canara Bank, Bank of Baroda, and
Allahabad Bank as the top pick for next week.
Bank stocks are unlikely to react to the 7.8% consumer inflation for August, as it was in
line with market expectation. However, they may react to July industrial output data,
which fell to 0.5% against expectation of 1.8%.
Both retail inflation and industrial growth data were released post market hours today.
Comments by bankers at the annual banking conference scheduled on Monday and
Tuesday in Mumbai may also provide trigger to bank stocks. Reserve Bank of India
Governor Raghuram Rajan, finance ministry officials and senior bank officials are
expected to attend the seminar.
Traders will also keenly eye the US Federal Open Market Committee's two-day meeting
starting on Tuesday, as the US Fed may announce the timing for a hike in interest rate,
which it has kept near zero since 2008.
