Asset quality will take time to improve, bank stocks still risky

Don't be swayed by the strong rebound in public sector bank stocks on Wednesday; the worst might not be over.  Indian stock market astrology prediction

That was the warning from analysts on the day the Bank Nifty rose nearly 10% — the highest single-day gain since May 2009 — triggered by the Reserve Bank of India's (RBI) move to ease Tier-1 capital norms.  Financial Astrology

While analysts cheered the central bank's move, they are advising investors to watch the earnings performance of these lenders over the next couple of quarters before taking the plunge.   Commodity Market Astrology Tips

"The extent of the upward movement was on account of the fact that the stocks were oversold," said Nitasha Shankar, vice president of research at YES Securities. 

"The RBI's move is a good and welcome one but asset quality issues remain a concern and will take some time to improve."   Nifty Trading Tips

SBI rose almost 12% on Wednesday, posting its single highest percentage gain since 2009, when the shares surged 20%. Bank of Baroda and PNB surged over 6% each. The Bank Nifty index rose nearly 5% to 15,092.45, the highest day gain since September 2013. 

A report by Motilal Oswal estimates that the relaxation in capital norms by the RBI could benefit public sector banks to the tune of about Rs 40,000 crore. These banks need capital of Rs 1,50,000 crore by 2017-18.   Share Market Astrology

"This is a good move but we should probably wait for a few more quarters before taking a concrete decision about investing in the sector," said Vaibhav Sanghavi, managing director at Ambit Investment Advisors.  Personal Numerology
 
He warned that the sector will witness volatility. "The rally probably occurred due to a hype in sentiment and also risk on trades which are happening across global economies," Sanghavi said.  Stock Market Trading Tips