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Informist, Friday, Aug 30, 2024

MUMBAI – The Nifty Bank index is seen range-bound next week, but may face some headwinds as data released post market hours showed that the growth in the Indian economy slowed to a five-quarter low in Apr-Jun.

India's GDP growth moderated to 6.7% in Apr-Jun due to softer government spending. According to an Informist poll, India's GDP growth was seen slowing to 6.9% in Apr-Jun. The Indian economy grew 8.2% a year ago and 7.8% a quarter ago.

Several brokerages have turned cautious on the banking sector due to moderating loan growth and widening credit-deposit ratio, as the recent regulatory actions point to the need to align credit growth with deposit growth while focusing on growing retail deposits.

The Reserve Bank of India officials have repeatedly urged banks to reduce their credit-to-deposit ratio. Recently the RBI increased the risk weights for high growth loan segments and proposed to review the Liquidity Coverage Ratio framework.

Brokerage firm Prabhudas Lilladher has trimmed weights on ICICI Bank, State Bank of India and Kotak Mahindra Bank. “Banks reported stable performance with peaked-out NIM, while asset quality deteriorated a bit. Private banks led by HDFC and ICICI did better than PSU (banks).” Prabhudas Lilladher said in a report released earlier this week.

The Nifty Bank gained 0.8% this week to settle at 51351.00 points, compared with a 1.7% rise in the Nifty 50 index.

"As long as the index remains over 50950, a 'buy on dips' strategy is recommended. On the upside, the rally might extend to 51800-52000 levels,” Hrishikesh Yedve, a senior technical research analyst at Asit C. Mehta Investment Intermediates, said in a note.

TOP HEADLINES

* RBI's proposed LCR norms to moderate credit growth of banks - ICRA

* Recent uptick in NPAs not as worrying as in 2010, says Ashima Goyal

* Talk of MUFG eyeing stake in YES Bank 'speculative', says MUFG chief

* Closely monitoring all credit areas, not just microfin says RBI Das

* One97 Comm's Paytm Payments to reapply for payment aggregator license

* Making UPI, RuPay truly global amid encouraging response - RBI Das

* Bks trying new avenues to fund deposit-credit growth gap - SBI Tewari

* Aim to open 30 mln Jan Dhan accounts by end of FY25, says Sitharaman

* SBI Chairman Khara resigns as director of SBI Cards and Payments

* Unified pension plan to cost Centre minimal 0.02% of GDP FY25: Nomura

* PhonePe posts consol net profit of 1.97 bln rupees for FY24

* Small fin bks may look at non-deposit avenues for loan growth - CRISIL

* Securitisation volume from housing fin cos seen up 27% YoY FY25: ICRA

* UPI has potential to become global remittance channel, says RBI Das

* Cabinet OKs new Unified Pension Scheme with assured returns

Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:

End

Reported by Richard Fargose

Edited by Saji George Titus

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