Nifty Bank index hits 17-month high

Indian Bank, Canara Bank, IndusInd Bank, Punjab National Bank were up more than 2% each on the NSE.

Banking shares both private and public sector undertakings (PSU) were in the limelight with the Nifty Bank index hitting 17-month high on the National Stock Exchange (NSE).

Nifty Bank, which represents the 12 most liquid and large capitalised stocks from the banking sector, hit an intra-day high of 19,269, its highest level since March 19, 2015 on the NSE.

At 10:25 am, Nifty Bank and Nifty PSU Bank indices were up 1% each at 19,261 and 3,037, respectively, as compared to 0.45% rise in the benchmark Nifty 50 index.

Indian Bank, Canara Bank, IndusInd Bank, Punjab National Bank (PNB) were up more than 2% each, while State Bank of India (SBI), Axis Bank, Federal Bank, Kotak Mahindra Bank, ICICI Bank and Bank of Baroda were up 1%-2% on the NSE.
 

Among the individual stocks, Indian Bank surged 9% to Rs 237, its fresh 52-week high on back of heavy volumes.

Thus far in August, it zoomed 53% from Rs 155, after the PSU bank had reported 43% year on year jump in net profit at Rs 307 crore for the quarter ended June 30, 2016 (Q1FY17). The bank’s gross non-performing assets (NPA) as a percentage of gross advances rose marginally at 6.97% against 6.6% and net NPA at 4.48% against 4.20% on sequential basis.

According to CRISIL, after the Reserve Bank of India (RBI) kept its policy rate unchanged at 6.5% at its August 9 meeting,  the rating agency expect the central bank to deliver a rate cut in October with further clarity on the monsoons and inflation trajectory.

Above-normal monsoon, which could improve rural demand, along with the lagged impact of interest rate reductions, salary revisions and easier monetary conditions are expected to support demand in future and boost industrial activity. We, therefore, expect industrial GDP growth to increase to 7.6% in fiscal 2017 from 7.4% in fiscal 2016, CRISIL said in August report.