Read Business Desk. Last week was a volatile one in the stock market. Now next week, investors will keep an eye on FII-DII Buying-Selling, Crude Oil Price, Dollar-Rupee Movement and Global Market Signals. This week the rupee strengthened by about 0.3%.
At the same time, the activity of FII and DII remains important for the direction of the market. The market has got relief from softening of crude oil prices, but the movement of dollar and crude can further affect Banking Stocks along with Sensex-Nifty.
Jefferies expressed confidence on 5 Banking Stocks
Amidst this market environment, global brokerage firm Jefferies has expressed its confidence in the banking sector. The brokerage has given Buy rating on HDFC Bank, ICICI Bank, Axis Bank, bank and SBI. For these five shares, the brokerage has given a target price above the current price.
Estimated rise of up to 44% in HDFC Bank
Jefferies has given a target price of Rs 1,050 with a buy rating on HDFC Bank. The current price of the share is considered to be around Rs 729. According to this, after reaching the target price, a possible rise of around Rs 321 or 44% is estimated.
Axis Bank's target is Rs 1,700
Jefferies is also bullish on Axis Bank. The brokerage has given a target price of Rs 1,700 against the current price of around Rs 1,236. According to this, a possible increase of about Rs 464 i.e. about 38% in the stock has been estimated.
38% rise expected in bank
Jefferies has also given Buy rating on the shares of bank. As against the current price of around Rs 174, the brokerage has given a target price of Rs 240. Upon reaching this level, the stock is expected to rise by around Rs 66 i.e. around 38%.
ICICI Bank's target is Rs 1,750
Jefferies has given a target price of Rs 1,750 on ICICI Bank. If we look at the price of around Rs 1,414, then a possible rise of around Rs 336 i.e. around 24% is expected.
Target of Rs 1,320 for SBI
The brokerage has also maintained Buy rating on State Bank of India i.e. SBI. Jefferies has given a target price of Rs 1,320 against the price of around Rs 1,038. That means, a possible rise of around Rs 282 or 27% is expected in the stock.
Credit growth strong in banking sector
According to Jefferies, Nifty rose by about 2% in the last one month, while Nifty Bank gained about 1%. As of August 25, system liquidity was in surplus of about Rs 3.6 trillion. Till July 31, Bank Credit Growth was 19%, while Deposit Growth was around 15%. With this the Credit-Deposit Ratio has reached around 82%.
Also keep an eye on developments related to Piramal and Federal Bank
The brokerage has also mentioned some corporate developments related to the banking and finance sector. These include Piramal's Capital Raising Plan of around Rs 39-40 billion and the report of Federal Bank's interest in buying controlling stake in Jana Small Finance Bank. Apart from this, the closure of SEBI's action related to the old Max-Axis Transaction case has also been mentioned.
The market will keep an eye on these factors next week
Apart from Banking Stocks, FII-DII flows, Crude Oil, Rupee-Dollar Movement and Global Markets will be important in deciding the direction of the entire market next week.
Jefferies target prices indicate potential upside, but are not guarantees of certain returns. Before investing in the stock market, it is important to look at the financials, valuation and risk factors of the company.
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