Bank Stocks
Outlook for the week – 27 to 30.01.2015
( www.rupeedesk.in )
Even as the overall sentiment for
the banking sector is bullish, bank stocks are expected to be
volatile ahead of contract expiry
on Thursday. Market sentiment has turned positive after the
Reserve Bank of India in a
surprise move cut the repo rate by 25 basis points to 7.75% on Jan 15.
We believe the repo rate cut is
just the beginning of an easing policy cycle, and more cuts would
further help banks. Bank Nifty
continues to skyrocket. Even if some correction is seen before the
expiry, investors may use this opportunity
to buy on dips as the overall trend is definitely
positive for banks.
Meanwhile, stock-specific
activity is expected to continue, with ICICI Bank, Bank of Baroda,
Union Bank of India and Andhra
Bank among others scheduled to detail their Oct-Dec results
next week. The Kotak Mahindra
Bank following good earnings numbers. High NIMs (net interest margins), return metrics
and asset quality are amongst the key positives.
