For Quick Alerts
For Daily Alerts

    Interest Rate Cut Expectations Rise; Buy Banking Shares


    With the CPI Data for the month of March coming in at a surprisingly low figure of 5.17 per cent, it has raised expectations of an interest rate cut again by the RBI.

    Interest Rate Cut Expectations Rise; Buy Banking Shares
    The Reserve Bank of India (RBI) has twice cut repo rates or interest rates in the past outside the policy this year and analysts are expecting one more outside the policy.

    The RBI is expected to meet only in June for its policy review and a rate cut before that now seems a strong possibility.

    There has already been some accumulation of banking stocks, particularly PSU banking stocks. Punjab National Bank has rallied from levels of Rs 146 to the current levels of Rs 165 in a span of two weeks.

    Syndicate Bank in a week's time has already gained from Rs 99 levels to Rs 109.

    PSU banks tend to see sharper rallies then private sector banks, which have already gained heavy ground in the last one year.

    Economic Growth May Rebound

    The International Monetary Fund and the World Bank say that at 7.5 per cent GDP, India will leapfrog China as the fastest growing economy.

    There are already greenshoots emerging on the economic front and this is expected to gather momentum.

    This could provide an impetus to banking stocks as economic growth could push demand for credit growth and help lower non performing assets.

    Among the stocks that could benefit include the large cap PSU banks like Bank of Baroda, Punjab National Bank and Canara Bank.

    Syndicate Bank which has all along been excellent in managing its non performing assets could see its stock price rise sharply as the company already has its NPAs under control.

    Another 15-20 per cent rally in PSU banking stocks cannot be ruled out, though one cannot expect such a rally in private banking stocks.

    Read more about: pnb canara bank syndicate bank
    Company Search
    Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'

    Find IFSC

    We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more