Bank rally justified?

protrade

Well-Known Member
#1
Over last few weeks, we have seen a serious pop in Bank shares. An SBI has shot up to 240+ levels, from below 180 not too long ago. And same with ICICI and others.

Our banks have benefitted from the loan moratorium - because there was no deterioration of credit since March. This meant, they could turn a blind eye to the real problems in the economy, and declare some hefty profits. Also, they have played their usual game - of not passing on rate cuts fully to borrowers, which created a semblance of profitability.

However, there are still serious questions about the economy. Many people have lost jobs or have had salary cuts - and now that the moratorium is over, it will soon be evident what will be the impact on the banking system.

Frankly, it is simply inconceivable that we have such dramatic impact to the economy, and banking system remains unscathed!

My sense is that banks will be impacted going forward and share prices will give up some of their recent gains.
 

Vmaster369

Active Member
#2
now banks are themself only buying themself and squeezing shortsellers .
Todays mehtas are bank itself ******************************************** :xD

Mehta na Raj ma market majama lol

no one was interested in buying hdfc bank at 900 lol now every one wants even at 1400
 
Last edited by a moderator:

Nish

Active Member
#3
Over last few weeks, we have seen a serious pop in Bank shares. An SBI has shot up to 240+ levels, from below 180 not too long ago. And same with ICICI and others.

Our banks have benefitted from the loan moratorium - because there was no deterioration of credit since March. This meant, they could turn a blind eye to the real problems in the economy, and declare some hefty profits. Also, they have played their usual game - of not passing on rate cuts fully to borrowers, which created a semblance of profitability.

However, there are still serious questions about the economy. Many people have lost jobs or have had salary cuts - and now that the moratorium is over, it will soon be evident what will be the impact on the banking system.

Frankly, it is simply inconceivable that we have such dramatic impact to the economy, and banking system remains unscathed!

My sense is that banks will be impacted going forward and share prices will give up some of their recent gains.
The answer lies in Momentum rush in whole of the equity markets world-wide ! .. All rallies in Emerging Markets are Risk-On rallies due to high liquidity globally.
.. Just imagine with negative GDP figures, traders are still hoping for Nifty at 14000 plus and BN at 35000 plus with expert bullish comments from foriegn brokerage firms !
.. But Trend is Friend - till then encash the rally with Bullish FnO trades in indices ! :)
 
#4
I think bank rally is not justified as profit contribution by the banking sector is not as expected by the investors. Rally is only driven by the news of pulling out of the moratorium period. This is just a surge and therefore the market will be corrected as a result of this
 

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