GOLDEN RULES FOR TRADING

Bank Stocks Outlook for the week – 11 to 15.07.2016

Bank Stocks Outlook for the week – 11 to 15.07.2016
(May move with positive bias next week; CPI eyed)

Stocks of banks are seen trading with a positive bias next week, with market participants eyeing retail
inflation data for June for cues on further monetary easing by the Reserve Bank of India. Having risen to a 21-month high of 5.76% in May, June's Consumer Price Index inflation figure, to be
released Tuesday, is keenly awaited as it would be the last inflation print before the central bank's third bi-monthly monetary policy statement on Aug 9. Yesterday, the Nifty Bank ended at 18016.25,
posting a 0.2% rise for the week.

Apart from inflation data, next week also sees banks' Apr-Jun financial results starting in earnest 
South Indian Bank yesterday announced its results for the first quarter of 2016-17 (Apr-Mar), although the numbers of some of the larger lenders will be more keenly eyed. Private sector bank IndusInd Bank will detail its earnings on Monday.

Apr-Jun will be the first quarter after the impact of RBI's asset quality review, which saw banks' nonperforming assets and provisions mounting, leading to cumulative losses of nearly 400 bln rupees over Oct-Mar for public sector banks.