Bank Stocks Outlook for the week – 08 to 12.02.2016
(To
take cues from Oct-Dec results, economic data)
Bank
stocks will take cues from Oct-Dec earnings and key economic data
scheduled
next week and trading would be mainly stock-specific. Sector
heavyweight
such as State Bank of India and Punjab National Bank along
with
Union Bank of India, Bank of India, Central Bank of India and
Oriental
Bank of Commerce, among others, will report their Oct-Dec
results
in the coming week.
After
the sharp sell off due to the on-going worries over NPAs (nonperforming
assets),
there has been some rebound mainly due to value
buying.
PSBs (public sector banks) will be tracked to gauge further
position
on NPAs. The recovery was mainly led by private sector banks.
Banks
have reported sharp drop their profitability on jump in
provisioning
following the Reserve Bank of India's direction to reclassify
certain
accounts over two quarters starting Oct-Dec. The central bank has
kept
March 2017 as the deadline for banks to clean up their books.
RBI
Governor Raghuram Rajan on Tuesday said that banks have "fair
span
of time" to recognise stressed assets and ensure adequate
provisioning
to meet the central bank's deadline on dealing with stressed
assets.
The
Bank Nifty has not seen aggressive short additions in the last few
sessions
despite trading near 52-week low. This means traders are
expecting
some short covering at current levels in the index, which can
take
it towards 15500.
At the
fag end of next week, market participants will eye economic data
for
further cues. Consumer price index-based inflation data for January
and industrial production data for December will be detailed on Friday.