India’s stocks benchmark rose as the country’s largest lender by assets, State Bank of India (SBI), advanced for a second day on optimism the bad-loan problem for state-run lenders has peaked.
The S&P BSE Sensex climbed 0.4% to a record 31,369.34 in Mumbai. State Bank of India was the top performer, by gaining 2.2%, the most in more than a month. Nine out of the 13 sub-indexes compiled by BSE Ltd gained, paced by a gauge of real estate companies.
“Our analysis suggests that large public-sector banks have taken significant recognition and we are closer to the peak of the non-performing assets cycle,” Adarsh Parasrampuria and Amit Nanavati, analysts with Nomura jointly wrote in an investor note. With risk-reward “turning favourable” for Punjab National Bank, Nomura upgraded it to a buy from neutral.
Investors also got bullish signals from two different data releases. The government said yesterday the amount of monsoon rainfall has been 5% more than normal since the season started last month. And exchange data showed foreign funds’ open interest, or number of contracts outstanding in value terms, rose 1.2% to about Rs1.5tn ($23bn) on Wednesday. “The next triggers will be the first-quarter earnings, and the progress of monsoon,” said Gaurang Shah, head investment strategist at Geojit Financial Services in Mumbai. “Banking stocks are benefiting from decisive moves from the government and the central bank to resolve the problem of bad loans.”
LEAVE A COMMENT Your email address will not be published. Required fields are marked*
QIIB’s net profit jumps more than 5% to QR927mn in 2019
Ahlibank is silver sponsor for 2020 Compliance and Combating Financial Crime Conference
Libya’s NOC issues warning over impact of oil blockade
Green deal law to make EU’s energy shift irreversible
South African Airways may get urgent funds from state bank
Virus crisis adds pressure on slowing China economy
Asian markets suffer more losses on virus outbreak
China virus may test Apple’s $250bn stock rally
Curbs on derivatives hit world’s biggest covered-bond market