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RBI commences MPC meet on Wednesday
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SME Times News Bureau | 02 Dec, 2020
Banking and financial sector
stocks will be in focus throughout rest of the trade week as the Reserve
Bank commenced its Monetary Policy Committee meet on Wednesday.
According
to analysts, these sectors have performed well, of late, and investors
are hopeful of a further upside in their stocks.
However, high valuations along with volatility-induced selling pressure might cap their gains.
"All
the banking and NBFC stocks have performed pretty well over the last 2
months and 'Bank Nifty' has appreciated by almost 40 per cent," said
Guarav Garg, Head of Research, CapitalVia Global Research.
"However,
the sector is still looking strong and any dip should be considered a
buying opportunity. Lower interest rates along with demand amy help in
improving the books. But commentary from RBI Governor Shaktikanta Das is
what retail investor should look for."
According to Vinod Nair,
Head of Research at Geojit Financial Services: "Banks had rallied well
in the recent period due to cheap valuation. It also triggered concerns
like weakening asset quality, moratorium problem and low credit growth
as economy opened."
"Finance sector reported better operational
performance in Q2FY21, and better credit growth is expected in 2021. The
biggest challenge was bad loans, for which the outlook is getting
better with regulatory support from the RBI and the government."
Still, he pointed out that NPA level is expected to be high for the next 1-2 years.
"Due
to standstill benefits from the RBI, banks didn't recognise further
slippages in Q2FY21, but in the next 2-3 quarters the NPAs can rise.
After the recent rally, banks are not as cheap; still on a medium to
long-term basis it is a good buy though consolidation can happen in the
short-term," Nair said.
"Banks have significantly strengthened
their capital during the last few months which is expected to aid
further growth in the business."
The RBI's MPC will release its final resolution on the monetary policy for the calendar year 2020 on December 4.
Besides, investors expect the Reserve Bank's MPC to hold rates in veiw of elevated inflation levels and economic activity.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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66.20
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64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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