Bank Stocks Outlook for the week – 15 to 19.06.2015
(Expected
to trade with a positive bias next week)
( www.rupeedesk.in )
Bank
stocks are expected to trade with a positive bias next week and are likely to
outperform the broad market, analysts said. Consumer price index-based
inflation for May, which was just a tad above market expectations, is expected
to be a key factor that can impact banks as the Reserve Bank of India
benchmarks its monetary policy actions to CPI data. As per data released today,
May consumer price indexed inflation stood at 5.01%, just marginally above the
Cogencis poll estimate of 5.00%.
The
RBI has already cut its repo rate by 75 basis points since January, and
indicated in the Jun 2 policy statement that the space for more cuts was
limited as it has increased its January 2016 CPI inflation expectation to 6.00%
from 5.50% earlier.
The
comments made by Finance Minister Arun Jaitley after his meeting with heads of
banks earlier today were largely positive for the sector. Jaitley said the
trend in bad loan ratio of banks was improving and that the government was
closely monitoring the situation. He also said that public sector banks put up
a strong case for infusion of additional capital. Banks will
be holding talks with the government till Jul 3 regarding capital infusion.
