Banks Flex The Earning Muscle; ICICI Charges Ahead

Market This Week

The market doesn't look interested in any minor U-turn as all domestic, as well as global events, are ending on a positive note. All eyes were on U.S.Fed's Federal Open Market Committee meet which concluded a couple of days ago. But with the major pressure coming from the US President to emphasise more on the GDP growth of the US economy, possibilities of the rate hike are fading away. The point to note is that the labour market has continued to strengthen even as the growth in the US economy slowed down.

Movers And Shakers

Indian economy looked poised last week as all eyes were on Federal Open Market Committee policy review. Investors looked much cautious and intraday volume had spiked at the same time. Traders were driving the market altogether. Speaking of the banking sector, a majority of the largecaps have disappointed the street as Non-performing Assets (NPA) have jumped significantly but the Government is adding some cushion by focusing on managing the NPAs.

At present, infra sector is looking stronger as in the recent time, more projects are opened by the Government. Consequently, the dependent sectors like cement, electric infra, steel are adding some flavour to the growth of the economy.

Key Market Drivers

ICICI Bank has shown an increase in NPAs during last quarter but the result was outstanding for the bank as earnings have jumped 3 folds and the bank itself is confident on building a solid franchise in order to resolve NPAs issues.

Finally, steel policy received a green signal from the Government where steel sector may get a boost as the Government is already emphasising more on infra and replacing the majority of raw material metals like iron ore with steel materials. This is a bigger boost for the steel companies. Adding to this, anti-dumping has been introduced which will focus on high production domestically.

Event Watch

Federal Open Market Committee has kept the policy unchanged but looks like the committee might hike rate in the June and September meet. It will be interesting to see how things shape up in the west as it will have an effect on the markets across the globe.

The Indian government is bullish on the market development. It is trying to open up every possible door of the majority of the sectors which are driving the growth of the economy. India and Pakistan troubles are still there and can not be neglected as any big step toward this can trouble the market on short term basis.

Stocks To Watch

Kakatiya Cement Sugar and Industries Ltd is on the upside while Infosys is on the downside.