 "Bank Nifty hits record high")
Banking shares continue to trend up in trade with the National Stock Exchange (NSE) Bank Nifty hitting a lifetime high today on expectation that various initiatives by new government will revive economic activity and help will boost credit growth.
Among individual stocks, State Bank of India, ICICI Bank, Bank of India, Punjab National Bank, Canara Bank, YES Bank, Axis Bank and HDFC Bank are up 1-2% on the NSE.
Bank Nifty, a gauge of banking share index, was up 1.4% at 16,442 compared to 0.57% rise in the benchmark CNX Nifty at 1100 hours. The banking index hit a record high of 16,453 during intra-day trade today.
Bank Nifty has outperformed by gaining 6.4% in past six trading sessions, after the Wholesale Price Index (WPI)-based inflation declined to its lowest level in five years at 2.38% in September from 3.74% in the previous month.
On Saturday, the government announced deregulation of diesel prices and hiked natural gas prices, a move that will help the government reduce its subsidy burden. A sharp cut in diesel price is expected to bring down freight rates which in turn could reduce consumer price inflation.
“Banks across the segment had lost pricing power during FY11-14; primarily due to sharp moderation in industrial loan growth. However, we believe various initiatives by new NDA government will revive economic activities and will lead to revival in capex cycle and in turn will boost the credit growth,” point out analysts at Karvy Stock Broking in a report.
"Ample liquidity in the banking system along with improvement in government finance is giving banks an opportunity to improve their cost of fund and margins. Superior return ratios coupled with easy access to capital market provides private banks greater ability to accelerate growth as economic activity picks up," they said.
Among individual stocks, State Bank of India, ICICI Bank, Bank of India, Punjab National Bank, Canara Bank, YES Bank, Axis Bank and HDFC Bank are up 1-2% on the NSE.
Bank Nifty, a gauge of banking share index, was up 1.4% at 16,442 compared to 0.57% rise in the benchmark CNX Nifty at 1100 hours. The banking index hit a record high of 16,453 during intra-day trade today.
Bank Nifty has outperformed by gaining 6.4% in past six trading sessions, after the Wholesale Price Index (WPI)-based inflation declined to its lowest level in five years at 2.38% in September from 3.74% in the previous month.
On Saturday, the government announced deregulation of diesel prices and hiked natural gas prices, a move that will help the government reduce its subsidy burden. A sharp cut in diesel price is expected to bring down freight rates which in turn could reduce consumer price inflation.
“Banks across the segment had lost pricing power during FY11-14; primarily due to sharp moderation in industrial loan growth. However, we believe various initiatives by new NDA government will revive economic activities and will lead to revival in capex cycle and in turn will boost the credit growth,” point out analysts at Karvy Stock Broking in a report.
"Ample liquidity in the banking system along with improvement in government finance is giving banks an opportunity to improve their cost of fund and margins. Superior return ratios coupled with easy access to capital market provides private banks greater ability to accelerate growth as economic activity picks up," they said.