At 12:53 PM; Nifty PSU Bank
index, the largest gainer among sectoral indices, was up 2% as compared to 0.43% rise in the Nifty 50 index. Nifty Bank and Nifty Private Bank index were gain 0.44% and 0.33%, respectively.
According to Reuters report, India has cut its additional market borrowing requirement by more than half for the financial year ending in March to Rs 200 billion ($3.13 billion), Economics Affairs Secretary S C Garg said on Twitter.
The news sent benchmark 10-year bond yields down over 15 basis points, it added. CLICK HERE TO READ FULL REPORT.
Last month, the finance ministry had said that the government is likely to borrow additional Rs 500 billion in 2017/18 fiscal year that ends in March.
Meanwhile, the analysts at Prabhudas Liladher expects lack of trading gains from investments and mark to market (MTM) loss provisions will keep pressure on earnings over & above the NPA provisions but most PSBs will see growth improvement from lower base of demonetisation and large up fronting of provisioning from last few quarters to enhance provision coverage ratio (PCR) and provide on strategic debt restructure (SDR)/ Scheme for Sustainable Structuring of Stressed Assets (S4A) in FY17.
Margins are likely to see slight uptick sequentially but still are weak to support overall profitability, but PSBs similar to its private peers will continue to see good control on opex growth (despite likely provisioning on wage related), the brokerage firm said in Q3FY18 preview.
On a sequential basis, analysts at Motilal Oswal Securities expect profit growth to pick up for state owned banks with moderation in provisions. The year-on-year growth is also expected to be strong on a benign base.
“Higher borrowing by the government would put pressure on bond yields, which could lead to treasury losses for PSU banks; bond yields have already surged sharply over the past one month. Dragged by weak core revenue, muted treasury gains and elevated credit costs due to National Company Law Tribunal (NCLT) referred cases + non performing lending (NPL) ageing, earnings are likely to remain under pressure,” the brokerage firm said Q3FY18 sector update.