Bank Nifty Fut (BNF: CMP@ 19168) got corrected till yesterday around 8% from its intermediate top of post RBI rate cut of around 20740.
Technically, for BNF, 19000-18900 is a good support zone and below that 18650 & 18450-18290 area will be positional support as of now.
On the upside, sustain above 19300-19600 zone, it may target 20930-21030 zone again and consecutive closing above that, mid term target may be around 21700.
For PSB(s), there are lingering concerns over NPA, slower loan growth along with RBI pressure over passing rate cut benefits to borrowers and issues of capitalisations. Lots of PSB(s) are also running with a proper CEO (for which, appointment process may be under process), which is also affecting decision making effectively. For Private Sector Banks, NPA management is also an issue.
But going forward, in the current rate cut cycle, another 50-75 bps can be expected by RBI in 2015-16, making standard real rate of interest (RBI REPO RATE-CPI) of around 2%, which is presently around 2.5% (7.5-5). Rate of inflation (CPI) is also expected to go down further on account of projected good monsoon this year and depressed commodity prices. Monetary policy alone may be not sufficient to bring down inflation considerably in our country and for that we need various structural reforms. But, in order to be more competitive and to make "Made In India" theme successful, we need to kick start investment cycle in the real economy and for that banks has to participate actively. Currently, PSB(s) control around 70% of our banking system & also contribute around 90% of the total NPA(s) in it.
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