PSBs extend gains; Indian Bank, Bank of India up over 3%

Shares of public sector banks (PSBs) were trading higher for the second straight day in a row amid softening of the yield on the 10-year gilt, following the Reserve Bank of India (RBI’s) open market operation announcement on Friday.

Indian Bank surged 7% to Rs 344, extending its previous day’s 3.5% gain on the National Stock Exchange (NSE). Bank of India up 4%, while IDBI Bank, Andhra Bank, Union Bank of India, Bank of Baroda, Canara Bank, Syndicate Bank, Oriental Bank of Commerce and State Bank of India (SBI) were up 2% to 3% on the NSE.

At 12:17 pm; Nifty PSU Bank index, the largest gainer among sectoral indices, was up 2.3% at 2,905 as compared to 0.15% rise in the Nifty 50 index. In past two trading sessions, the PSU bank index was up 4.4% against 1% rise in the benchmark index.

Stock recos from Prabhudas Lilladher: Buy L&T, Bajaj Auto & Bank of India

STOCK MARKET - Nifty outlook and few trading ideas by Vaishali Parekh, Research Analyst - Technical Research at Prabhudas Lilladher
NIFTY VIEW:
Nifty has shown resistance at around 10500 levels and has witnessed some volatility with profit booking in some counters. As of now, Nifty has taken support at 10250 levels, which is also where the significant moving average of 34WMA lies. However, the support for the week lies at 10120 while resistance lies at 10460. As said earlier, a decisive breach of 10200 can bring about fresh selling and we may see more downside.

BUY BANK OF INDIA    
CMP: Rs 196.35      
TARGET: Rs 250    
STOP LOSS: Rs 185
The stock has been consolidating after the huge spurt it gave 2 weeks back and now it has been gathering potential and strength to rise further and we anticipate a level upto 240 -250 can be achieved in the coming days. The volume has been significant and on the improving end and with RSI and MACD on the rise, a positive bias has been maintained in the stock. We recommend a buy in this stock for an upside target of 250 keeping a stop loss of 185.

BUY LARSEN & TOUBRO
CMP: Rs 1,264.95    
TARGET: Rs 1,380    
STOP LOSS: Rs 1,220
The stock was in a consolidation phase for some time at around 1210- 1230 range and now it has produced a positive bullish candle formation in the daily chart regaining strength and it signifies potential to rise further still upward in the coming days. The RSI has shown a steep rise with a trend reversal and also support our view of a positive bias. With volume activity on the rise in recent times, we recommend this stock for an upside target of 1380 keeping a stop loss of 1220.

PSBs recover from intraday lows; Bank of India, Andhra Bank up 2%

STOCK MARKET - Shares of public sector banks (PSBs) erased their intra-day losses and recovered up to 5% in late morning deals on the National Stock Exchange (NSE).

Bank of India, Indian Overseas Bank, Central Bank of India, Bank of Baroda, Oriental Bank of Commerce and Punjab National Bank recovered in the range of 2% to 5% from their respective intraday lows.

At 11:07 AM; Nifty PSU Bank index was up 1.1% at 3,062, bouncing back 1.6% from its intra-day low of 3,015 on the NSE. The benchmark Nifty50 index trading 0.7% higher at 10,164, was close to its record high of 1,0179, touched on September 19, 2017 in intra-day trade.

The Nifty PSU Bank index on Thursday hit an intra-day low of 2,995, its lowest level since January 10, 2017. The index ended at 3,028, slipping 19% from its recent closing high of 3,723 on July 31, 2017.

By comparison, the benchmark Nifty 50 was down marginally by 0.58%, while Nifty Bank (down 4%) and Nifty Private Bank index (down 2%) were down less than 5% during the period.

According to rating agency CRISIL, the operating profitability (pre-provisioning profitability, or PPoP) of banks should stabilise by the end of this fiscal, mainly driven by improvement in the net interest income. This will be supported by lower interest reversals on non-performing assets (NPAs), pick-up in credit growth, and reduction in funding costs.

“Pressure on the earnings profiles of banks would reduce from next fiscal if banks increase provisioning on large corporate NPAs this fiscal,” said Krishnan Sitaraman, Senior Director, Ratings, CRISIL. “Stabilisation in operating profitability and mitigation of asset quality stress would then set the stage for earnings revival, especially of PSBs, as they focus more on credit growth.

Bank of India gains 6% as assets quality improves in Q1

STOCK MARKET - Bank of India rose 6% to Rs 163, bouncing back 9% from its early morning low of Rs 149 on BSE, after the bank’s assets quality improves sequentially as well as on yearly basis in June quarter (Q1FY18).

Gross non-performing assets (NPA) as a percentage of total loans fell to 13.05% at end-June from 13.22% at March-end and 13.38% at end-June last year. Net NPA too decline to 6.7% in Q1FY18 from 6.9% in Q4FY17 and 7.78% in Q1FY17.

The bank has reported a net profit of Rs 87.71 crore during the quarter under review, due to lower provisioning for bad loans. It had posted a loss of Rs 741 crore in the same quarter last fiscal.

Net interest income (interest earned minus interest expended) however declined by 9% to Rs 2,533 crore from Rs 2,775 crore in the corresponding quarter of previous fiscal.

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All ATM withdrawals not chargeable, SBI clarifies after furore in Kerala

Amid a public outcry in Kerala over a State Bank of India (SBI) announcement levying charges on ATM cash withdrawals from June 1, the largest public lender on Thursday clarified that the charge of Rs 25 is applicable only for withdrawals from SBI Buddy through ATMs.

"Rs 25 per transaction charge is applicable only for mobile wallet app SBI Buddy using ATM. This is applicable only for State Bank Buddy customers," the bank said here in a statement.

The clarification comes after the SBI in a notification indicated that all ATM withdrawals will be charged a fee of Rs 25, which was later replaced with the corrected notification.

The bank said that the number of free withdrawals from ATMs remained unchanged.

Jan-Dhan account holders with the SBI can avail of four free withdrawals in a month from ATMs.

Normal savings bank accounts holders will continue to get eight free ATM transactions (five from SBI ATMs plus three from other bank ATMs) in metros and 10 free transactions in non-metros (five from SBI ATMs plus five from other bank ATMs).

Earlier in the day, Kerala Finance Minister Thomas Issac told the media that the only reason he could see for this "mad" new rule was that the SBI was faced with mounting non-performing assets (NPAs) to the tune of Rs 1.67 lakh crore.

"This is height of madness and irresponsibility. It would be interesting to find out the list of NPAs of the SBI... One wouldn't be surprised if the majority (of defaulters) are found to be corporates."

"Just take a look at their (SBI) profits, it has dramatically come down. The charges have been levied to bring down their losses. This is something that even private sector banks would not dare think of doing," said Issac.
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Reason to cheer: No more limits on cash withdrawals at ATMs

BREAKING NEWS - All limits on savings bank cash withdrawals post-demonetisation ended on Monday, as had been announced by the Reserve Bank of India (RBI) last month.

In a two-stage process, the weekly withdrawal limit per account had been raised to Rs 50,000, from Rs 24,000, with effect from February 20, and all limits on ATM withdrawals were slated to cease from March 13.

The announcement had been made by RBI Deputy Governor R. Gandhi following the fiscal's last monetary policy review announcement by the central bank in February, when it kept its key interest rate unchanged at 6.25 per cent, saying it awaited data on the full impact of the government's demonetisation drive.

On January 30, the RBI had ended all curbs on withdrawals from Current Accounts, Cash Credit Accounts and Overdraft Accounts.

The limits were placed following the November 8 demonetisation of Rs 1,000 and Rs 500 notes. The upper limit at ATMs was just Rs 2,500 initially and was later raised to Rs 4,500.

In January, the RBI had hiked the daily ATM withdrawal limit to Rs 10,000 and doubled the weekly Current Account withdrawal limit to Rs 1 lakh.

The upper limit for weekly withdrawal from bank accounts had been raised to Rs 24,000 from Rs 20,000 in November.

While lifting of ATM withdrawal limits represents coming full circle for these machines in respect of demonetisation, the return to normalcy in terms of cash available in them is still awaited, indicating the slow pace of remonetisation.(READ MORE)

Cash deals worth Rs 25,000 cr move to digital mode post note ban: Survey

Latest Business News - Post demonetisation, cash-based transactions worth Rs 25,000 crore have moved to the digital mode, says a survey.

The Economic Research Department of State Bank of India carried out the survey from December 30, 2016 to January 3, 2017 so as to understand the nuances of demonetisation. It showed that 15 per cent of transactions moved to electronic payments such as m-wallets and Point of Sale machines.

"This means that Rs 25,000 crore of cash based transactions have moved to digital in the last two months. If this is so, this is a good beginning," SBI Research said in its Ecowrap report.

This number could have been even higher because the behavioural shift has not happened yet and many merchants still prefer cash transactions when the amount is not large, the survey said, adding that a number of merchants are facing connectivity issue at POS machines.

It further noted that around 69 per cent of the respondents affirmed that their businesses were impacted and the overall decline in business is less than 50 per cent for the majority of the businesses that were impacted.(Read More)