Punjab National Bank (PNB), Allahabad Bank, Oriental Bank of Commerce, Bank of Baroda, Union Bank of India, Bank of India and Canara Bank were up in the range of 1% to 4% on the National Stock Exchange (NSE).
Nifty PSU Bank index was up 0.93% at 3,021 in intra-day trade today in otherwise subdued market. With the today’s gain, the PSU bank index surged 11% from its recent low of 2,716 recorded on March 23, 2018. The benchmark Nifty 50 index gained 3% during the same period.
“Yesterday good tail end exuberance in PSU banking was certainly an eye catching move. Hence, traders should watch out for this space as we expect continuation of this optimism in next couple of days,” Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking said.
RBI kept its key interest rates unchanged for the fourth straight meeting, as widely expected, saying it is committed to achieving the medium-term target for headline inflation of 4%.
The Reserve Bank expects India's economic growth rate to strengthen to 7.4% in the current fiscal, from 6.6% in 2017-18, on account of revival in investment activity.
“There are now clearer signs of revival in investment activity as reflected in the sustained expansion in capital goods production and still rising imports, albeit at a slower pace than in January". Secondly, global demand has been improving, which should encourage exports and boost fresh investment, “Angel Broking said in a client note.
“While we expect lower slippages this fiscal compared with the previous two ones, the GNPAs will still remain elevated, touching 10.5% of advances by March 31, 2018 owing to slower recoveries. However, the pace of fresh additions to NPAs has declined in fiscal 2018 and is expected to break stride further in fiscal 2019,” rating agency CRISIL said in Monetary Policy review.
This would be supported by continued improvement in credit outlook of corporate sector, driven by rising commodity prices, stabilization in operating cycles and improved debt protection metrics. Thus, CRISIL Research expects the GNPA as a proportion of total advances to come down to around 10.3% in fiscal 2019 after touching around 11%, it added.